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.
Sierra Resources Partners LP retained Detring Energy Advisors to market for sale its roughly 24,000 net-acre contiguous, operated position in the geologic sweet spot of the liquids-rich Olmos trend in La Salle and McMullen counties, Texas.
Underpinned by strong production and cash flow, Detring said the asset is primed for development with an inventory of 64 highly-economic, long-lateral locations. Sierra has seen a material uplift in recent well performance via landing zone optimization, according to the firm.
Highlights:
- Roughly 24,000 Net Acres (100% Operated, about 97% Working Interest)
- Highly-contiguous position in the geologic sweet spot of the prolific Olmos trend
- Large mineral estates across three combined owners allows for long-lateral development and efficient surface facility build-out
- Minimal drilling requirements to maintain the entire position
- One well in 2019, three wells in 2020 and beyond
- Flexibility to develop within cash flow or accelerate and bank obligation wells
- Highly-contiguous position in the geologic sweet spot of the prolific Olmos trend
- About 12 million cubic feet equivalent per day of Liquids-Rich Production (roughly 54% liquids)
- About $12 million next 12-month proved developed producing (PDP) cash flow funds continued near-term development
- PDP: roughly $45 million PV-10 value (about 33 billion cubic feet equivalent net reserves, 7.5 years reserves-to-production ratio)
- 3P: roughly $370 million PV-10 value (about 470 billion cubic feet equivalent net reserves)
- Extensive gathering, processing, and transportation infrastructure in place
- Advantageous location for marketing & transportation yields realized pricing of $1.46-plus per barrel to West Texas Intermediate and on par to Henry Hub
- Prolific Horizontal Development Opportunity
- 64 geologically de-risked locations
- Roughly 80%-100% single-well internal rate of returns
- About 14 months to payout
- $5.6 million drilling and completion costs for 8,500 ft ($660 per lateral-ft)
- Specific targeting of the high-porosity zone within the Olmos C has led to greater than two times improvement in recent well performance
- Project supported by significant well control and seismic amplitude variation with offset (AVO)
- Seismic shows Class 3 AVO characteristics consistent with AVO synthetics from rock physics modeling using control wells
- AVO data available for review
- 64 geologically de-risked locations
- Extensive Geologic Data Set
- Seismic interpretation, petrophysical analysis, core studies, mapping and static modeling geologically de-risk the acreage
- About 36 ft high-porosity landing zone (about 12% average porosity) and underlying high net-sand interval show consistent thickness and porosity across the position with rock quality increasing away from the Edwards Reef onto Sierra’s acreage
Process Summary:
- Evaluation materials available via the Virtual Data Room on Aug. 26
- Proposals due Sept. 25
Sierra anticipates executing a purchase and sales agreement by mid-October, with closing occurring by Nov. 30.
For information visit detring.com or contact Melinda Faust at mel@detring.com or 713-595-1004.
Recommended Reading
Kimmeridge Fast Forwards on SilverBow with Takeover Bid
2024-03-13 - Investment firm Kimmeridge Energy Management, which first asked for additional SilverBow Resources board seats, has followed up with a buyout offer. A deal would make a nearly 1 Bcfe/d Eagle Ford pureplay.
M4E Lithium Closes Funding for Brazilian Lithium Exploration
2024-03-15 - M4E’s financing package includes an equity investment, a royalty purchase and an option for a strategic offtake agreement.
Laredo Oil Subsidiary, Erehwon Enter Into Drilling Agreement with Texakoma
2024-03-14 - The agreement with Lustre Oil and Erehwon Oil & Gas would allow Texakoma to participate in the development of 7,375 net acres of mineral rights in Valley County, Montana.
California Resources Corp. Nominates Christian Kendall to Board of Directors
2024-03-21 - California Resources Corp. has nominated Christian Kendall, former president and CEO of Denbury, to serve on its board.
Uinta Basin: 50% More Oil for Twice the Proppant
2024-03-06 - The higher-intensity completions are costing an average of 35% fewer dollars spent per barrel of oil equivalent of output, Crescent Energy told investors and analysts on March 5.