January 10, 2017: update on Permian valuation, Midland, Southern Delaware = $26,000 / acre.
[By the way, a 3-part series on the Midland/Permian: http://themilliondollarway.blogspot.com/2014/12/the-permian-geologic-overview-december.html.]
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.Note:
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.
- $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