Cub Creek and Elster invest up to USD 70 million
Mannheim/Denver. Cub Creek Energy plans to commence an extensive drilling program on the company’s Colorado acreage in June 2019. It will consist of 11 2 mile horizontal wells from the Olander drilling site and represent an investment of approximately USD 60 million. Cub Creek’s working interest is approximately 93%. Drilling is expected to commence in early 2020.
With an average oil price of USD 54 per barrel over the life of the well, Cub Creek’s management anticipates an Internal Rate of Return (IRR) of 20-42%. The low value applies to the so-called base case with conservative assumptions regarding production rates. The higher value would be realized in the case of a production that is 20% above the base case.
Elster Oil & Gas is expected to participate in eleven wells in the coming months. These new wells are directly adjacent to the areas of which Elster is already producing very successfully. If Elster participates in all wells, this means an investment volume of up to USD 10 million. The wells, which started production in February and March 2018, have recovered the total investment volume of around USD 57 million after less than a year.
Mannheim, 8 April 2019
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