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