Resaca Exploitation Inc.

Transaction Type
Sellers
Marketers
Post Date
Close Date
Estimated Price
MM
Description

Resaca Exploitation Inc. has retained Albrecht & Associates Inc. to sell its interests in two mature waterflood units, the Cooper Jal and Langlie Jal, in Lea County, New Mexico.

Resaca has about 6,300 gross acres, (4,600 net), within the Yates, Seven Rivers and Queen formations at depths ranging from 2,900 feet to 3,800 feet. Included in the sale are interests in 106 proved developed producing wells with established decline curves. There are also 66 proved developed non-producing opportunities, 87 proved undeveloped locations and three probable behind pipe opportunities.

In addition to the proved and probable reserves, there is upside potential from improving the waterflood and installing a carbon dioxide (CO2) flood in both of the units.

Within the Langlie Jal Unit, Resaca is selling its 74% working interest (58.7% net revenue interest) in 37 producing waterflood wells, 14 shut-in wells, 17 temporarily abandoned wells, 44 water injection wells, 1 water source well, 13 proved, non-producing candidates and 3 probable behind pipe opportunities.

In the Cooper Jal Unit, Resaca is selling its 72.5% working interest (56.0% net revenue interest) in 67 producing oil wells, 2 producing gas wells, 2 water source wells, 34 water injection wells and 1 shut-in water injection well. Resaca operates the unit, which is located in Lea County, New Mexico and contains 2,541 gross acres (1,841 net acres) all of which are held by production.

Williams Petroleum Consultants Inc. estimates potential CO2 net reserves of 17.3 million barrels of oil.

Average November 2012 net sales volumes are projected to be about 380 barrels of oil per day, 160 Mcfd and 35 barrels per day of natural gas liquids. Total Proved net reserves are 9 million barrels of oil equivalent (BOE). Resaca operates all wells and intends to transfer operations to the buyer. Cash flows for the 12 months ending June 2012 was about $8.9 million.

The data room is open from Oct. 29 to Nov. 21. Bids are due on Nov. 28, and the effective date of the transaction is Nov. 1. For additional information, contact Harrison Williams, executive vice president of Albrecht & Associates, at 713-951-9586.