28,000 net acres/300 barrels daily production
Mannheim. Bright Rock Energy has signed a purchase agreement for extensive areas in the US state of Wyoming. The package consists of approximately 28,000 net acres (approximately 11,300 hectares or 111 square kilometers) with currently five wells, which produced approximately 300 barrels per day in April 2020. Bright Rock will be the operator for the vast majority of the acres. Around 40% of the acreage is “held by production”, i.e. the area is secured for the long term without further drilling obligations. At present, several drilling permits have been granted which provides optionality during any price rebound.
The purchase price reflects almost exclusively the value of current production based on the current forward curve. Only a small value was attached to the large number of possible wells, as they are not economically viable at current oil prices. The transaction is subject to the usual due diligence, which will be conducted in the coming weeks. The transaction is expected to be completed by mid-July.
Chris Sutton, CEO of Bright Rock, commented: “We are delighted to announce the acquisition of this very large land package. It gives us the opportunity to develop significant new production when oil prices return to normal above 50 USD/barrel. The position is nearby several emerging oil fields, where strong drilling results are being realized while drilling costs are falling. The state of Wyoming also offers very good and stable conditions for oil and gas production.”
Mannheim, 2 June 2020
Deutsche Rohstoff identifies, develops and sells attractive raw material deposits in North America, Australia and Europe. The focus is on the development of oil and gas deposits in the USA. Metals such as gold, copper, rare earths, tungsten and tin complete the portfolio. Further information can be found at www.rohstoff.de