Tuesday, August 16, 2016

Midland Basin Data Points With New Acquisition -- August 16, 2016

Updates

January 10, 2017: update on Permian valuation, Midland, Southern Delaware = $26,000 / acre.

Original Post
 
The Midland Basin is a "component" of the Permian Basin. I will add "Midland Basin" as a separate link at the sidebar at the right, which will link to this page in the future.

[By the way, a 3-part series on the Midland/Permian: http://themilliondollarway.blogspot.com/2014/12/the-permian-geologic-overview-december.html.]

Link here.
Parsley Energy Inc., Austin, has agreed to acquire undeveloped acreage and producing oil and gas properties in Glasscock County, TX, along with associated mineral and overriding royalty interests, for $400 million in cash.

The assets cover 9,140 net acres near existing Parsley leasehold, with estimated current net production of 270 boe/d from 67 gross (60 net) vertical wells.

The acreage features 215 net horizontal drilling locations in the Lower Spraberry, Wolfcamp A, and Wolfcamp B formations, based on 660-ft between-well spacing, with an estimated average lateral length of 7,500 ft. Average working interest from the identified drilling locations is 92%.

Separately, the firm says its first producing horizontal well on its Glasscock County acreage acquired in May has shown encouraging results. The Dwight Gooden 6-7-01AH well, 2.5 miles west of the acreage to be acquired, completed in the Wolfcamp A interval with a 5,890-ft stimulated lateral, registering a peak 30-day initial production rate of 1,161 boe/d, or 197 boe/d/1,000 stimulated ft.

Normalized to 7,000 lateral ft, the well is outperforming the firm’s 1 million boe EUR type curve for Midland basin Wolfcamp A/B wells by 10% after almost 90 days of production, generating 82% oil during that timeframe.
Note:
  • $400 million / 9,140 net acres = $44,000 / mineral acre
  • short laterals
  • 660-foot spacing
  • 82% oil 
  • outperforming the firm's 1 million boe EUR type curve

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