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!