The following information is provided by Detring Energy Advisors LLC. All inquiries on the following listings should be directed to Detring. Hart Energy is not a brokerage firm and does not endorse or facilitate any transactions.
AE&J Royalties LLC is offering for sale a mineral interest position located in the core of the Delaware Basin in southern Lea County, N.M.
Detring Energy Advisors, which was retained for the sale, said the AE&J position is "concentrated in the highest-returning portion of the highest-returning basin in the Lower 48" with substantial near-term cash flow as a result of premier operators drilling extended laterals utilizing next-gen, high-intensity completion techniques.
Cash flow from the offered assets is forecasted to reach roughly $5 million in 2020E. Currently, the position includes exposure to seven proved developed producing and 17 drilled but uncompleted horizontal wells and permits.
Detring added the offering includes non-cost bearing clauses across roughly 50% of the net royalty acreage that increases margin and realized cash flow. Additionally, the offering's high royalty interests average about 2% per well, accelerating the impact of on-mineral development.
- About 550 Net Royalty Acres (at 1/8)
- 100% minerals
- Roughly 50% non-cost bearing
- Core mineral position operated by premier Delaware Basin E&P’s
- About 50% Concho Resources Inc., 35% Cimarex Energy Co., 15% BTA Oil Producers LLC and less than 5% Chevron Corp.
- Prolific stacked-pay in the deep, overpressured core of the most active basin in the United States
- IP-24: 2,300 to 4,900 barrels of oil equivalent per day
- EUR: 1.3 million to 2.3 million barrels of oil equivalent
- Spacing: 28 wells per mile
- Significant cash flow generated by 24 existing horizontal wells/permits:
- About $5 million (2020E); about $8 million (next three years); about $20 million (full-life)
- Substantial undeveloped inventory generates about $65 million of additional undiscounted cash flow (about $85 million 3P)
- 70 total undeveloped locations across the Wolfcamp A, Wolfcamp B, Bone Spring 1-3 and Avalon
- Total net inventory of 1.9 wells (0.5 developed / 1.4 undeveloped) normalized to 7,500 ft
- Additional unbooked inventory in the highly prospective Wolfcamp C and Wolfcamp D
- Southern Lea County exhibits the highest quality Bone Spring and Wolfcamp rock properties found throughout the Delaware Basin
- About 5,000 ft of stacked-pay with multiple landing zones and upside throughout the position
- Evaluation materials available via the Virtual Data Room Aug. 14
- Proposals due Sept. 11
The contract will extend by 20 years the current contract with the same companies that will expire in late 2023.
The company plans to start Aerfugl production in first-half 2020, three years ahead of what had originally been billed as the field’s second phase.
The new deadline applies to the second bid round for onshore and offshore blocks that the state energy firm launched last May, a spokesman told Reuters.