Equal Land Sale vs Recent $17.3M Trioil Purchase Now that Equal has sold their Lochend cardium lands. Let's do a rough analysis on how this compares with Trioil's recent spend of $17.3M for 14 Lochend sections.
EQUAL SALE
Equal reports that they got $62M for their 8,000 acres (13 sections) of land. Along with this, they sold 525 boepd (net) of production (93% oil).
Looking to the EQU corporate website, they report that 13 net wells were producing 400 boepd this summer. So let's say that 14 wells are now in place. I am assuming that the initial whopper 900+ boepd well is part of the this mix getting them to the 525 boepd.
Assuming 4 wells/section, this means that (14/4) = 3.5 sections are already drilled up, leaving 9.5 sections of undrilled land. These are most likely all probable given the small amount of land here. Don't have a map and bunch of pins to figure this out.
Now let's say that Equal sold its production for $90k per flowing barrel. This requires a purchase price of $47.25M. This leaves ($62.5M - $47.25M) = $15.25M.
So they got ($15.25M/9.5 sections) = $1.6M/section for lands that are 'fairl'y proven up. Again, I say fairly, because I don't have maps and pins on hand.
TRIOIL PURCHASE
Trioil's recent Lochend purchase cost was ($17.3M/14 sections), or $1.21M/section.
CONCLUSION
To me, it looks like Trioil paid the going rate, or even slightly more than the going rate for the land.
These are basic numbers. There are factors such as: thickness of pay in the trend for the two blocks, amt of infrastructure included in the Equal deal, desperation of Equal to sell, discussion of proven vs probable for each block, and what a flowing barrel goes for in this area to consider.
I invite anyone reading this to add their knowledge to my numbers. I am not an oilman by trade.
L6