Wednesday, February 17, 2021

CLR Acquisition In The Power River Basin, Wyoming -- February 17, 2021

CLR February, 2021, presentation, link here.

CLR may refer to this as the "Samson deal," or the "Samson acquisition" or the "Samson leasehold."

History of Samson Resources, from the blog's "operators page":

Note the "relationship" of Samson Resources with CLR. 

For background by the company go to this site first: undated, but it appears to have been posted late 2019, or early 2020, with strategic overview/plans for calendar year 2020:

  • headquartered in Tulsa, OK
  • March 1, 2017: Samson Resources emerged from bankruptcy as Samson Resources II, LLC
  • 85 new equity investors
  • assets in
  • East Texas / North Louisiana
  • Wyoming: Greater Green River and Powder River basins
  • September, 2017:
  • the company sold its assets in East Texas/North Louisiana for $525 million
  • company paid off existing debt and make a large cash distribution to its sharebholders
  • In September, 2019:
  • the company sold its assets in the Greater Green River Basin
  • declared another special distribution to its sharesholders
  • 2020: pure play Powder River Basisn
  • 132,000 net acres
  • 2,400 state permits
  • 10,000 bopd (73% liquid)

Then this site, January 4, 2021:

  • to sell all of its Powder River Basin to an undisclosed buyer for $215 million in an all-cash transaction;
  • the company exited 2020 producing 8,500 boepd (75% oil) from the Powder River Basin
  • the sale is expected to close on/about March 4, 2021
  • effective date: January 1, 2021
  • following the closing, the company will have divested substantially all of its upstream assets
  • the company's only remaining upstream oil and gas assets will consist of approx 24,000 net leasehold acres, 23,000 net mineral acres and 40 non-operated wells, all located in East Texas, Oklahoma and Louisiana which the company anticipates divesting in early 2021
  • using proceeds fro that sale, the company will pay off approx $13 million in debt and make a cash distribution to its unitholders
  • CEO: Joseph A. Mills
  • founded in 1971 by Charles Schusterman
  • following the closing of the Powder River Basin sale, the company will begin the process of winding down its affairs and moving toward final dissolution

Now, the February, 2021, CLR corporate presentation, linked above, slide #11:

  • straddles Campbell and Converse counties in Wyoming
  • net resource potential:
  • 400 million boe
  • 75% oil
  • net acres: 130,000 (80% held-by-production)
  • current net production: 9,000 boepd, 80% oil
  • federal permits: 96 in-hand (6 rig years)
  • purchase price: $215 million
  • close: March 4, 2021
  • three of the top five wells in the Powder River Basin in the leasehold position
  • average IP30: 2,670 boepd (88% oil); 2,670 x 30 days = 80,000 boe per 30-day month
  • CLR 2-rig program starting in 2Q21
  • initial targets: Shannon, Frontier, and Niobrara
  • future targets: Sussex; Mowry, Muddy
  • the six formations: 4,800' stacked play

Back-of-the-envelope:

  • $215 million / 130,000 net acres = $1600/acre
  • one primary target
  • two secondary targets
  • three future targets, in a stacked play

CLR is tracked here.

  • last time I checked, May, 2018, 796,000 net acres in the Bakken
  • 130,000 / 796,000 = 16%

6 comments:

  1. Federal land can be an issue in the PRB.

    ReplyDelete
    Replies
    1. I saw that, too, and would be very, very concerned. Permits-in-hand no longer mean anything. Biden will selectively pull back permits -- and Biden will remember that Harold Hamm was huge Trump supporter.

      Delete
  2. Was discussed on the earnings call. Mostly Federal land.

    They can screw with you by stopping right of way for gathering lines. Also, they claim 6 rig years of permits, but that's a single rig for six years. So, not really what's needed to move into development mode.

    PRB is a nice fit with the corporate culture and history. But really unfortunate to have bought into this, given Biden won. Also, I think getting the Senate too, has emboldened him, to lean more left.

    ReplyDelete
  3. I agree completely, although the corporate presentation said they would start a 2-rig program in Wyoming in 2021. They only have a 2- to 3- rig program in the Bakken. You don't need many rigs to develop a field any more. They are drilling Bakken wells in six days or less. The drilling is not the long pole in the tent.

    ReplyDelete
  4. They are going to be running 8 rigs in the Bakken by year end. Was discussed on the earnings call. 2 rigs is not sufficient to stabilize production. Yes, the rigs are more efficient. But they're not supernatural.

    ReplyDelete
    Replies
    1. Compared to almost everything else in the Bakken, the rigs are almost supernatural. LOL. What is supernatural are the roughnecks and the geologists in charge of the drilling.

      Thank you for the update on 8 rigs in the Bakken. I had not seen that yet; waiting for the transcript.

      By the way, that 8 rigs in the Bakken and 2 rigs in the Powder River are interesting:

      8/796 = 0.01
      2/130 = 0.015

      Very, very interesting. Both the Powder River and the Bakken are in the same stage of development.

      Delete

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