The properties acquired consist of seven active producing wells and one salt water disposal well on approximately 1,700 gross acres (1,150 net acres), of which 50% is considered developed. The Company purchased an average 78% working interest in the properties' existing wells and an average 61% working interest in any future undeveloped locations. Current gross production is approximately 2.3 Mmcfd (1.4 Mmcfd net) and 28 barrels of condensate per day ("Bcpd") (16 Bcpd net) from various intervals in the Vicksburg, Frio and Wilcox sands, generating net field level operating cash flows of approximately $200,000 per month.
Bryce Rhodes, the Company's president and CEO, said, "This transaction provides the Company with organic growth opportunities, which are extremely important in the current high commodity price environment. Our initial review of 3D seismic data for all three fields has already identified three proved and three probable behind pipe recompletion candidates, as well as three proved and six probable undeveloped drilling locations. From this acquisition alone, we have increased our total assets by approximately 45%, net daily gas production by approximately 80%, and net field level operating cash flows by approximately 40%. The creative use of equity, seller financing, and borrowings under our credit facility has allowed us to complete this transaction in a competitive acquisition environment without significant dilution to our common stockholders, while positioning Whittier for strong future growth."
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