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LYNDEN ENERGY CORP. V.LVL

"Lynden Energy Corp is an oil and natural gas company. The Company is engaged in the acquisition, development, and exploration of oil and natural gas properties. Its projects include Wolfberry and Mitchell Ranch projects in the Permian Basin, West Texas."


TSXV:LVL - Post by User

Comment by Barnett_Veton Dec 31, 2013 1:21pm
154 Views
Post# 22049154

RE:RE:Recent Transaction

RE:RE:Recent TransactionI wish they had released that information also. They will provide production data in the next quarterly release. You may be able to glean some insights from the metrics released in the related acquisition from Crownrock to Breitburn.  Crownrock sold 16.6 MMboe in proved reserves for roughly $17 per boe. 

If you look at the Lynden/Breitburn transaction, Lynden received $4.1 million per net well with an estimated D&C cost of only $2.4 million per net well ($2.4 million is Lynden's estimated well cost for 2014 based off the latest quarterly press release). That's a 71% profit per well, not counting the production revenue already received from each well. 

Roughly 85 net acres was allocated to each net well sold (403/4.7=85).  After the transaction Lynden should have around 6,063 net acres and 28.3 net producing wells.  6,063 divided by 85 equals 71 well locations, of which 43 location are yet to be drilled (71-28=43).  71*$4.1 million equals $291 million. They probably can't get $4.1 million for each the well that is currently producing but this transaction looks positive IMO.  There's also potential upside from the Mitchell Ranch and horizontal development in the Wolfcamp. 
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