Marketed: Core Delaware Basin Nonop Asset, Ward County, Texas

Transaction Type
Sellers
Marketers
Basin
Permian Basin; Delaware Basin
Announce Date
Post Date
Close Date
Room Opening Date
Estimated Price
MM
Description

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.

Rio Oil and Gas (Permian) II LLC retained Detring Energy Advisors for the sale of a core Delaware Basin nonop opportunity in Ward County, Texas.

The offer comprises of nonoperated working interest and related assets in the Block 18/War Wink Field of Ward County within the Permian Basin. According to Detring, the company's exclusive adviser for the transaction, the assets offer an attractive opportunity to acquire an 8.33% working interest with a relatively low royalty burden (1/6th) ahead of a significant horizontal well program operated by Chevron USA Inc.

Drilling operations have commenced on the initial five well pad with Chevron indicating it plans to spud a second five well pad immediately following the drilling of the initial pad. A total of 10 wells are expected to be completed and online prior to Dec. 31, 2020, Detring said.

Highlights:

  • 8.33% in a roughly 3,364 contiguous gross acre contract area in the core of current Ward County horizontal development
    • 6.94% Net Revenue Interest (1/6th effective royalty burden)
    • Large, contiguous footprint allows for extended-reach laterals
    • Operated by Chevron Corp., a premier Delaware Basin operator
    • Acreage is 100% HBP by long-life, low-decline vertical production (about 30 barrels per day of oil net, roughly 7% next 12-month decline)
  • Anticipated Large Scale Horizontal Development Program
    • University Lands development contemplates about 30 extended-lateral wells (six pads) to be drilled on the assets by the end of 2023 (about four years)
    • The first five-well pad has already spud, with a second five-well pad expected to spud immediately thereafter (10 wells expected turn-in-line by end-of-year 2020)
    • There are no legacy (parent) horizontal wells on the acreage; the development program will have the benefit of optimum reservoir management from its inception
  • Simultaneous, Multi-Bench Development Imminent
    • Prolific stacked-pay in the deep, overpressured core of the most active basin in the U.S.
    • Robust type curves generate IRR’s of 70%-plus (WCA / BS3) in current pricing environment
    • Future development potential in multiple Wolfcamp and Bone Spring horizons (four to six wells per mile)

Process Summary:

  • Evaluation materials available via the Virtual Data Room on Oct. 21
  • Proposals due on Nov. 20

Detring said the seller anticipates executing a purchase and sales agreement by mid-December, with closing occurring in January.

For information visit detring.com or contact Melinda Faust at mel@detring.com or 713-595-1004.

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