Project Profile
Value: Undisclosed
Location: Permian Basin, Glasscock, Howard, Martin, Midland, and Sterling counties, USA
Production: 1,000 boe/day
Start-up Year: -
The Wolfberry play, originally named because of the commingling of production from the Wolfcamp and Spraberry Formations, is a major low-permeability oil play in the Permian Basin. Located principally in western Texas, the Permian Basin is one of the most prolific oil-producing basins in North America. The largest accumulation of oil and gas reserves in the Permian Basin is found in the Spraberry trend, which cover large parts of six counties and has a total area of approximately 2,500 square miles.
Completions in the Wolfberry are generally anticipated from a 2,500 to 3,000 foot gross interval, and located between 7,000 and 10,500 feet, drilling depth. Completions begin at the bottommost formation, and can include up to 8 to 12 fracture stimulations. Nearly 2,000 wells have been drilled since the beginning of the play in late 2007. In October 2009, Lynden entered into a Participation Agreement to acquire an interest in oil and gas leases covering approximately 16,500 gross acres in Glasscock, Howard, Martin, Midland, and Sterling counties with the Wolfberry as the primary objective. The leases are contained within five prospect areas around which five areas of mutual interest (AMI) have been established. The company will receive 43.75% of the vendor\'s interest which ranges from 50% to 100% in the leases by paying 50% of the drilling and completion costs attributable to the vendor\'s interest, and by paying for the first US$2 million spent in connection with any new leases or extensions of existing leases on lands located within the AMIs. Production net to Lynden, before royalties, from its Wolfberry Project in the Permian Basin, West Texas has averaged 900 barrels of oil equivalent (boe) over the second half of July 2012, including two days in excess of 1,000 boe/day. Production net to Lynden, after royalties, averaged 700 boe/day. The production is from 37 gross (15.77 net) vertical Wolfberry wells and is approximately 65% oil and 35% gas and associated liquids.
The company\'s current plans call for the spudding of 37 gross (15.60 net) wells across the Wolfberry Project in calendar 2012, an increase over the previously announced 31 gross (12.97 net) wells. Twenty of the 37 wells remain to be spud. The company anticipates significant increases in daily production volumes as development of the Wolfberry Project continues and is targeting a December 31, 2012 net production exit rate, after royalties, in excess of 1,000 boe/day. The company anticipates financing the majority of its Wolfberry Project capital expenditures through current working capital, operating revenues, upward borrowing base revisions on the US$50 million reducing revolving line of credit with Texas Capital Bank, and potential asset sales. The Wolfberry Project covers 18,413 gross and 16,493 net acres, equivalent to 6,509 acres net to Lynden.
Operators:
Lynden Energy: Operator with 43.75% working interest
BreitBurn Energy Partners: 56.25% interest