Thursday, December 23, 2010

Note on Lynden's Wolfberry Project Reserves

Further review of Lynden Energy Corp.'s Project Reserves report released on October 28, 2010 shows that their Proved plus Probable reserves as of June 30, 2010 was estimated to be $64.0M based upon 2011 oil pricing of $79.54/barrel. That reserve estimate would greatly improve if it were based upon today's oil pricing of over $90/barrel. With Lynden's increased activity in the Wolfberry, that project alone should justify at least $1.00/share.

Lynden has very little downside risk based upon their Wolfberry holdings and any success with their Mitchell Ranch project will significantly increase their value.

Goldman Sachs releases research stating "Permian Basin Renaissance to Intensify in 2011"

Goldman Sachs released a research report stating that they believe that we are still early in the Permian Basin oil renaissance. There are multiple sources of upside including downspacing, exploration success finding additional productive zones and technology to improve productivity. "There has been a sharp pick-up in industry activity in the Permian Basin." They expect the improvements that were realized in the Permian Basin in 2010 to continue in 2011.

The research was very good in calling attention to the upside potential of companies doing business in West Texas including the Wolfberry trend. As more attention is drawn to this area, the companies exposed to the Wolfberry trend should outperform.

Monday, December 20, 2010

Lynden Energy drills three Wolfberry wells

Lynden Energy Corp. announced that they have recently drilled three Wolfberry wells (click here to see the release). They are now cased and ready for completion. The release states that "all three wells had encouraging oil and gas shows during drilling."

Wednesday, December 8, 2010

Linn Energy Announces 2011 Plans for Drilling Wolfberry

Linn Energy announced its 2011 Capital Program today (click here). They are planning to drill more than 130 wells in the Wolfberry trend which they are calling high rate-of-return liquids focused low-risk, low-cost projects.

Saturday, November 20, 2010

Permian Basin is hotter than it has ever been

The Fort Worth Star-Telegram wrote an article highlighting the Permian Basin and Approach Resources. Highlights include:

- "The Permian Basin is hotter now than when oil was $140 a barrel and it may be hotter now than it ever has been," said Ben Shepperd, president of the Permian Basin Petroleum Association.

- Approach Resources is placing a $100 million bet on the Permian Basin focusing on the Wolfberry trend and drilling "Wolffork" wells. These wells target the Wolfcamp and Clear Fork formations.

- The wells produce oil, natural gas and natural gas liquids from multiple formations and can potentially achieve "a two- to three-year payout."

- "The Permian Basin is undergoing a major revival. Midsize and large producers are plowing money into the Permian, through acquisitions of oil and gas properties costing hundreds of millions of dollars. Lease bonuses... are now topping $10,000 an acre."

- "I think the Permian has an extremely good future," Jim Henry said.

Wednesday, November 10, 2010

Recent Deals Support Huge Potential for Lynden Energy Corp.

In the past two and a half months, there have been eight deals relevant to Lynden Energy Corp. (LVL) and the Wolfberry Trend. These deals range from $4,272/acre to $19,354/acre.

With LVL now having approximately 7,000 net acres in their Wolfberry core area and a 50% interest in the 101,495 acre Mitchell Ranch project, the math alone translates into a MUCH higher stock price! The reserves in LVL's Wolfberry play have been independently valued at $64 million (PV10) based upon $70/barrel oil. LVL's Wolfberry land may have more potential than neighboring land which was likely used for the PV10 valuation as LVL's announced flow rates show that their land is highly productive.

If LVL can get the results they are looking for in their Mitchell Ranch project, we could be looking at a company with a future market cap of $500 million or more!

Friday, November 5, 2010

Canaccord Genuity Issues Report on the Permian Basin Highlighting its Enormous Potential

Canaccord Genuity's recent Daily Letter included a comprehensive report on the Permian Basin and Wolfberry play. It is very bullish on oil prices, the Wolfcamp shale and the Wolfberry.

The report states "One acre in the Permian does equal one acre in the next horizontal oil trend." This report is the most complete report we've seen covering the Permian Basin and recent trends. Highlights from the report will be forthcoming.

Action is Clearly Heating Up in the Wolfberry Play

Four recent deals have been announced in the past few days:

Berry Petroleum entered an agreement on October 25 to purchase 9,300 acres in the Wolfberry trend for $180 million. This deal is valued at $19,354/acre.

Energen Resources Corporation signed an agreement on November 1 to purchase 10,360 net Wolfberry acres for $75 million. This deal includes six producing wells and is valued at $7,239/acre.

Also on November 1, Approach Resources acquired 5,033 net Wolffork acres for $21.5 million ($4,272/acre). The asset inlcudes 470 boe/d of current production.

PDC Energy announced on November 3 that it entered into an agreement to acquire 5,760 Wolfberry acres for $40 million ($6,944/acre). This deal includes six wells.

Clearly, this flurry of recent activity is bringing a lot of attention to the Wolfberry Play in West Texas. Lynden Energy Corp. (LVL) has over 5,000 acres in their Wolfberry core area and a 50% interest in the 101,495 acre Mitchell Ranch. It appears that it is only a matter of time before LVL's stock price sees a significant rise!

Tuesday, October 19, 2010

Approach Resources Announces Wolffork Resource Play

Approach Resources announced that it is planning to drill and recomplete Wolffork wells in the Permian Basin. This clearly demonstrates that companies are realizing the huge potential of these zones. Success here could have huge implications for Lynden Energy Corp. (LVL) at their Mitchell Ranch project.

Several other deals have also been recently announced. They include a $285 million acquisition by Concho Resources, a $352.2 million Wolfberry acquisition by Linn Energy, and a $180 million acquisition by El Paso. The El Paso acquistion is interesting because it is for raw land only without any existing wells. El Paso is targeting the Wolfcamp formation.

Monday, August 23, 2010

Energen to Acquire Wolfberry Properties for $185 Million

Energen Corporation announced today that it will acquire 8,700 net acres of Wolfberry land in Martin County for $185 million. Acquisitions of Wolfberry properties are heating up in Texas. This deal equals $21,264/acre and includes only 19 existing wells.

Lynden Energy Corp.'s (LVL) Wolfberry project is not far behind this property in terms of development and could be there soon. One can easily extrapolate LVL's value based upon the Energen deal.

If we assume that the 19 wells cost approximately $1.6M each and take that out of the price, the Energen deal is essentially worth $155M for the 8,700 acres. This equals $17,770/acre.

Lynden, together with CrownRock has approximately 15,500 net acres with 5 wells in the Wolfberry. Using Energen valuation metrics, the Lynden/CrownRock Wolfberry is worth (15,500 x $17,770) + (5 x $1.6M) = $283M (assuming that LVL’s Wolfberry is as valuable as Energen’s).

Assuming that LVL’s interest in the total Wolfberry acreage is approximately 33%, LVL’s Wolfberry is worth ($283M x 0.33) = $94M.

With 73.3M shares outstanding, LVL's value of their Wolfberry play is $1.28/share!

This does not include any value for Mitchell Ranch, Paradox Basin or other assets such as cash. Mitchell Ranch could drastically increase LVL's value if even a portion of it is successful. LVL could be looking at possible 10x or more increase in their stock price!

Thursday, July 29, 2010

Three Recent Deals in the Permian Basin

Three deals have been recently announced in the Permian Basin. Concho Resources announced it will be acquiring a property for $1.65 billion the same day that Apache announced its $3.1 billion acquisition. Prior to that, Linn Energy announced it will acquire properties in the Wolfberry trend for $90 million.

Thursday, June 17, 2010

Lynden Spuds First Mitchell Ranch Well, Thom Calandra Considering LVL for Ticker Trax Investment

Lynden Energy Corp. (LVL) and CrownRock have spud their first Mitchell Ranch well. They expect to spud their second well in early July. Excitement is building as Thom Calandra from Ticker Trax wrote an article today highlighting LVL and says that "the company has a shot at leveling the plains here and making a bundle for its investors."

Keith Schaefer of Oil & Gas Investments in Canada says that "the potential to create a lot of value quickly is there."

The article also mentions that Daniel Rice of BlackRock Energy & Resources Fund is a big supporter and large shareholder of LVL. BlackRock and Pinetree Capital are some of LVL's larger shareholders which adds credibility to this company.

Exciting news for this company!

Wednesday, June 2, 2010

Lynden Energy Corp. Options 101,495 Acres

Lynden Energy Corp. (LVL) has entered into an agreement to acquire a 50% interest in an option to acquire oil and gas leases on a 101,495 acre ranch in Coke, Mitchell and Sterling counties. This is a great opportunity for LVL to participate in a large scale oil project. Together with CrownRock, they are planning two wells to be spudded in June. Success in this play could return multiples to LVL's current stock price!

Tuesday, May 25, 2010

PDC Announces Wolfberry Acquisition

Petroleum Development Corporation (PDC) announced it has signed an agreement to purchase assets in the Wolfberry Oil Play. Details of the acquisition include a purchase price valued at $75 million for 8,300 net acres in Midland, Ector, Martin and Andrews counties ($9,036/acre). PDC plans on drilling the Wolfberry oil wells on 40-acre spacing.

Wednesday, April 21, 2010

Permian Basin Mentioned in Goldman Sachs Report

Goldman Sachs (GS) issued a report on the oil and gas sector on Monday and included comment on M&A acquisition potential. Interestingly, they stated that although Apache Resources’ plate is full following the asset acquisition from Devon Energy and the corporate acquisition of Mariner Energy, they “see additional potential for Apache to expand its onshore position, particularly in the Permian Basin.”

This is an interesting comment as it demonstrates how important the Permian Basin and Wolfberry play are. For a company to have made two large acquisitions and state that their “plate is full,” it says a lot that GS sees potential for additional acquisitions in the Permian Basin. Lynden Energy Corp.’s (LVL) land is positioned in the heart of the Wolfberry play in the Permian Basin and can capitalize on this attention.

Mentions of the Wolfberry Play in the Deal Magazine

The Deal magazine has published recent articles mentioning the Wolfberry oil play in the Permian Basin. The article, “Gettin’ oily” says “a flurry of deals have targeted the Wolfberry oil trend in the Permian Basin.” It noted the deals by Linn Energy, Berry Petroleum and Concho Resources and the high prices paid for Wolfberry acreage.

The article, “Representing a very hot sector”, says that the state of oil and gas deal making is “very hot” and there have been a tremendous number of deals already. They see M&A transactions in the oil sector to continue.

All of this attention on deal making in the Wolfberry play and Permian Basin continues to bring attention to Lynden Energy Corp. (LVL). With the success of LVL’s Wolfberry wells, we should continue to see stock price appreciation, especially if the company gets the attention of bigger players. This is an extremely tightly held stock and large gains can happen very fast.

Tuesday, April 20, 2010

Insider Purchase

Richard Andrews, the Chairman of the Board for Lynden Energy Corp. (LVL), has made another insider purchase in the market. He purchased 35,000 shares at $0.71.

Thursday, April 15, 2010

Apache and Mariner Energy Enter Deal Worth $2.7 Billion

Apache Resources announced that they are acquiring Mariner Energy in a deal valued at $2.7 billion. Mariner is one of the companies that is currently developing the Wolfberry play in West Texas. Mariner has a substantial land position in the Permian basin including Wolfberry acreage. M&A activity in the Permian Basin continues to occur with large valuations given to Wolfberry potential.

All of the recent Wolfberry activity continues to bring attention to the area and the companies developing those zones. Lynden Energy Corp. (LVL) is one of those companies that is positioning themselves very well in the Wolfberry play.

Tuesday, April 13, 2010

Huge Opportunity to Capitalize on the Hottest U.S. Oil Play!

This is a huge opportunity to take advantage of the Wolfberry Oil Play. With Lynden Energy Corp.’s (LVL) small market cap and big opportunity to exploit the Wolfberry play, this company could really take off once their story becomes known. Even though LVL has a limited land position in the Wolfberry at this time, it’s still a significantly undervalued company in our opinion. With the experience of their operator, CrownQuest, they have the expertise to complete the Wolfberry wells at minimal risk as has been demonstrated by the success from their first three wells.

The appreciation in LVL’s stock price should continue as more and more people learn about the Wolfberry and LVL’s potential.

Monday, April 5, 2010

Lynden has a Truly Unique Opportunity to Capitalize on the Wolfberry Oil Play

Based upon the net interests shown in Lynden Energy Corp.’s (LVL) Annual Report, LVL has between 3,700 and 3,850 net acres. At 80 acres spacing, LVL could have around 47 net wells in the Wolfberry play from their current inventory of land. If the spacing is decreased, LVL could have even more wells.

LVL has seized a unique opportunity to exploit the Wolfberry oil play. They are a small company with a land position in the hottest oil play in the U.S. and can attract serious market attention in a hurry!

Tuesday, March 30, 2010

Linn Energy Announces Third Permian Basin Acquistion!

Linn Energy announced their third Permian Basin property acquisition for $305 million. The price is valued at $109,000 per flowing barrel and $17.00 per proved Boe. It appears that Linn has purchased the properties at a premium to recent Permian Basin acquisitions. We believe this is due to the upside potential of the Wolfberry play. Linn has the potential for approximately 125 probable Wolfberry drilling locations.

Raymond James has reiterated their Outperform rating for Linn as they believe that Linn is capitalizing on opportunity including upside potential in the Wolfberry play.

This is another example of a company paying a large sum for Wolfberry play exposure. Each acquisition draws more attention to the Wolfberry play and Lynden Energy Corp.’s (LVL) terrific opportunity. It’s possible that LVL could be an acquisition target at some point in the future depending upon their success in the Wolfberry.

Monday, March 29, 2010

LVL up 20%!

Lynden Energy Corp. (LVL) saw another big jump in their stock price on Friday. The stock closed at $0.71, up 20% on the day. Their recent success in the Wolfberry play is not going unnoticed and the company is attracting attention.

Wednesday, March 17, 2010

An Exciting Day for Lynden!

An exciting day for Lynden Energy Corp. (LVL)! With the recent news announcing the success of LVL’s second and third wells, the stock price jumped 34% today up to $0.55 on over 2.4 million shares. The recent news shows that LVL is capable of repeating the outstanding results they achieved from their first well, Harrell 34 #1.

It’s worth noting that 811,000 shares were purchased in the market by Richard Andrews, the Chairman of the Board!

Lynden Announces Successful Completion and Tie-in of Second and Third Wolfberry Wells

Lynden Energy Corp. (LVL) announced that the Miller Trust #101 and Mallard 23 #2 wells have been tied into production. The Mallard 23 #2 is currently producing at a rate of 83 bo/day and 344 mcf/day. The Miller Trust #101 is producing at a rate of 75 bo/day and 70 mcf/day. LVL states that they are especially encouraged by the initial results from the Miller Trust #101 given that they could not drill down to their target depth to test two deeper targets. Both wells are still returning completion fluid and we believe that flow rates can be expected to increase.

They also reported that the Harrell 34 #1 well has produced in excess of 6,500 barrels of oil and 14 mmcf of gas since being tied in. Their Roy 1 well has also been completed and scheduled to be tied into production shortly.

These are very encouraging results and we expect that this news will not go unnoticed by the market. At its current price of $0.41, this company is dramatically undervalued and a strong buy at these levels. LVL's opportunity for a large stock price appreciation is outstanding!

Friday, February 5, 2010

Pioneer Announces Success in the Wolfberry

Pioneer Natural Resources announced at their February 3 conference call that they’re having a lot more success in the Wolfberry play. They have found out that “the Wolfcamp is more prolific than we thought just inside the Spraberry.” They are getting an additional 30 to 35,000 barrels additional by drilling into the Wolfcamp and are seeing much better results.

Lynden Energy Corp. (LVL) has drilled their first three wells down through the Wolfcamp and have outstanding results from their first well. That well flowed an average of 138 bo/day and 277 mcf/day over the first fourteen days of production. It will be interesting to see if they can duplicate that with their next wells. If so, they might be on to something!

Thursday, February 4, 2010

Callon Shifts Onshore into the Wolfberry Play

Callon Petroleum Company announced details of its strategy shift to diversify its asset base onshore on February 2. They stated “the cash flow generated from our two deepwater fields with quality, long lived resources will be reinvested into onshore conventional oil and shale gas properties.” They said they made two transformational acquisitions “extending its operations onshore into the Wolfberry oil play in the Permian Basin.” Their primary target in the Permian Basin is the Wolfberry trend.

Callon is another example of a company targeting the Wolfberry play in West Texas.

Permian Basin Gaining More Attention

The Houston Chronicle published an article on January 30 about the Permian Basin. They stated that the basin is looking more attractive and that several oil and gas companies have recently struck deals to enter the basin and diversify production away from natural gas to oil.

Recent deals that have occurred in the Permian Basin:

- Sand Ridge closed an $800M deal to buy Permian Basin Properties from Forest Oil Corp. in December
- Concho Resources agreed to a $225M deal with private sellers for Permian Properties in November
- Linn Energy said in December it would acquire properties in the Permian and Anadarko basins for $155M
- Vanguard Natural Resources closed a $55M deal for Permian Basin Properties in January
- Berry Petroleum announced in January that it would buy Permian Basin oil properties in the Wolfberry trend for $126M

These deals demonstrate that others are willing to pay large sums for Wolfberry and Permian acreage. Lynden Energy Corp.’s (LVL) opportunity is outstanding!

Harrell Well is Indeed an Excellent Wolfberry Well!

The Wolfberry is still a relatively new play and there is not much information out there. Companies are paying a lot more attention to the play and are actively acquiring Wolfberry assets. Following is what other companies are saying about Wolfberry wells and what typical Initial Production rates are.

Devon Energy says that they have growth opportunities in the Wolfberry oil play in West Texas. “The Wolfberry is a repeatable play that generates outstanding rates of return with low geologic risk.”

An article from the AAPG Explorer magazine states that operators are chasing production from the Wolfcamp and Spraberry formations (Wolfberry). They state that “initial production ranges from 35 to 125 barrels per day.

A Concho Resources Inc. presentation shows their typical Wolfberry production curve and they expect initial production from their Wolfberry wells to be 90 bo/d and 230 mcf/d.

Public information that is available clearly demonstrates that Lynden Energy Corp.’s (LVL) Harrell well is a superior well. The Harrell well is averaging 138 bo/d and 277 mcf/d over fourteen days! LVL’s future is looking brighter given their success with their first well in the Wolfberry play.

Wolfberry Update from Lynden

Lynden Energy Corp. (LVL) reported that their Harrell well produced an average of 138 barrels of oil and 277 mcf per day over the first fourteen days of production. These are excellent results and the company said that they “exceed the range of expectations for a typical Wolfberry well.”

They have also completed drilling of two more wells, the Miller Trust #101 and the Mallard 23 #2. LVL has shifted their focus away from natural gas and towards oil. They appear to have made a successful transition as their new leases are located in the Wolfberry play in West Texas in what may be the hottest new oil play in the U.S.! They have also teamed up with CrownQuest Operating out of Midland who has been very successful completing Wolfberry wells in adjacent areas. CrownQuest has the experience necessary to make LVL’s Wolfberry project a success.