SCS can get $100M TOMORROW from 2 JVs, and retain 75,000 net acres (50,000 + 25,000) which is more than enough to drill for the next 15 years. To increase its liquidity (although it is not necessary because SCS has $5-6 million FFO quarterly currently), SCS has these options:
1) Make a JV (50-50) on the remaining 10,000 net Beaverhill Lake acres (100% WI) it owns.
ARN sold 1.75 net Beaverhill lake sections for $10 million few weeks ago. That piece of land had zero production and reserves associated with it. It was just undeveloped land.
SCS sits on the sweet spot as the IP-30, IP-60, IP-90 results prove in comparison to ARN's.
SCS results are even better than MHR's Bakken results in North Dakota.
"Second Wave now has a total of 35 gross (16.4 net) Beaverhill Lake light oil wells in Judy Creek
with average approximate 30-day initial production (“IP”), 60-day IP and 90-day IP light oil rates
per well of 500 bbl/d, 283 bbl/d and 219 bbl/d, respectively. These wells are currently producing
at an average estimated rate of 95 bbl/d per well after an average of 235 days of production".
https://www.magnumhunterresources.com/Magnum_Hunter_Resources.pdf
This is why, SCS can sell 5,000 net acres (50% WI) from its 10,000 net acres (100% WI) to receive $40 million minimum. After all, it will keep 25,000 net acres in Beaverhill Lake which is enough to propel its growth for many years and it will have a big cash pool to use 3-4 rigs.
2) Make a JV (50% WI) on the 100,000 net acres (100% WI) on Pekisko it owns. SCS can get more than $60 million this way.
Provident Energy acquired for $90M pure undeveloped an area of similar extent (~50,000 net acres) with Pekisko rights in 2008.
"Provident has acquired a 100 percent interest in approximately 54,000 acres of undeveloped land in Northwest Alberta, offsetting Provident's existing operations in the area. Provident is pursuing an internally-generated exploration play targeting medium gravity oil from the Pekisko formation. This is consistent with Provident's increased focus on full cycle exploration and development activities".
3) The PEKISKO POTENTIAL
Apart from the excellent results that CREW ENERGY has from the Pekisko formation, Pembina acquired Provident Energy in early 2012 for $3.1 BILLION.
One of the three CORE areas for Provident Energy's was the PEKISKO FORMATION.
The giant Provident Energy characterized Pekisko as a low risk, HIGH IMPACT OIL PLAY.
Two horizontal exploratory Pekisko wells had EACH in excess of 250 barrels of OIL ONLY per day. I quote:
"Core Areas
Northwest Alberta
"...... the assets consist of low risk, shallow to medium depth natural gas from multiple zones and a high impact oil play. Pekisko multi-stage frac oil play consisting of 94 net sections of Pekisko mineral
rights, five producing wells and surface infrastructure. More than 300 identified potential drilling locations that target Muskeg and Keg River light oil, Pekisko medium gravity oil and Bluesky natural gas".
"Emerging Oil Play in Northwest Alberta
Provident has acquired a 100 percent interest in approximately 54,000 acres of undeveloped land in Northwest Alberta, offsetting Provident's existing operations in the area. Provident is pursuing an internally-generated exploration play targeting medium gravity oil from the Pekisko formation. This is consistent with Provident's increased focus on full cycle exploration and development activities. This land base was assembled through 2008 and covers an extensive exploration trend which Provident believes contains significant oil in place. During 2008, Provident has conducted a geological and seismic study and drilled two horizontal exploratory wells which have each production tested in excess of 250 barrels of oil per day.
Provident's independent reserve evaluator has assigned approximately 2 million barrels of total proved plus probable oil reserves associated with these two test wells and offset locations. Provident has identified in excess of 300 potential drilling locations on its lands to exploit the Pekisko play and will continue to use multi-stage frac technology to enhance the ultimate recovery of this resource".
The links
https://online.wsj.com/article/SB10001424052970204468004577164801067042914.html
https://www.bloomberg.com/apps/news?pid=newsarchive&sid=aqhsihl_9BYU
https://www.plsx.com/Publications/AD/2009/CdnAcq_20081022_i25.pdf
https://issuu.com/podiummc/docs/providentenergy-factsheet