630 net acres with associated production comprising of 7 net Lynden wells for 25mil! Works out to 40,000 per acre which is near the top of recent wolfberry land transactions. Keys to note:.
1. The fear of an equity raise to fund 2013 capex plans should be all but removed. In addition, concerns on the working capital position will greatly reduce. Both are big positives.
2. The transaction price highlights just how undervaled this play is based on wolfberry acreage alone. While it would be speculating to say the entire net acreage is worth 40,000 per acre, the fact that even some of it is should wake the market up to the discount currently being handicapped into this play.
3. Despite selling production on 7 net wells, LVL made a point of reiterating their previously announced guidance. Does this mean that they were ahead and can still meet even after netting off 7 net wells or is it that this wont close till 2013 so the guidance is not factoring in the production drop as a result of the sale. Opinions or interpretations are appreciated.
4. Longs can thank me in particular as i sold a few shares just today at 93 cents. I am riding with 85% of my original position so not complaining too much but it figures they announce this mere hours after i pushed the sell button. So.......your welxome.
Zad