Monday, February 28, 2011

LINN Energy announces $238 million purchase of Permian Basin and Wolfberry Trend properties

LINN Energy announced two deals worth $238 million consisting of Permian Basin and Wolfberry Trend properties. The properties are reported to have about 180 potential oil drilling locations.

Thursday, February 17, 2011

Canaccord Genuity Releases Research on Pioneer Natural Resources

Canaccord Genuity released a research report on Pioneer Natural Resources today titled "Drill Baby, Drill!" in reference to its Permian Bain play. Canaccord believes that "the Permian Basin is the most underappreciated basin in the Lower 48." Pioneer's exploration and Canaccord's report continues to highlight attention to the Wolfberry and Wolfcamp trends which is referred to as a "world-class" oil play.

Of note, the report states that the Wolfcamp Oil Shale trend may span a 19 county area of West Texas. Should this trend extend to Lynden Energy's Mitchell Ranch, Lynden could be on to something big with their 50% interest in over 100,000 acres.

Besides the Wolfcamp and Wolfberry intervals, Pioneer also believes that the Strawn and Atoka intervals could be prospective.

Monday, February 7, 2011

Lynden announces update on Wolfberry and Mitchell Ranch projects

Lynden Energy Corp. (LVL) announced that they have tied three new Wolfberry wells into production for a total of eight gross wells. The first well is averaged 79 bo/d and 136 mcf/d over the first 32 days of production. The second well has averaged 49 bo/d and 71 mcf/d over the first 13 days. Lynden's third well is in the Wind Farms area and averaged 90 bo/d and 215 mcf/d over 22 days. Flow rates of all three wells appear to be improving with time. These three wells all appear to be successful and Lynden says that "initial results from the wells are very encouraging."

Lynden expects to drill one new Wolfberry well each month this year and seven new wells are expected to be spud by the end of May. Lynden's success with developing their Wolfberry project continues to derisk their land and increases the company's value. Their recent results validate Keith Schaefer's (Oil and Gas Investments Bulleting) low end valuation of their Wolfberry lands at $0.97/share.

Lynden also announced that their first Mitchell Ranch "has been consistently producing oil and gas at rates that exceed the economic threshold." This is significant news as it's the first indication that the Mitchell Ranch could be a viable project. If they can continue this success with future wells, their valuation could be up to $20,000/acre for their Mitchell Ranch project ($20,000/acre x 50,000 acres = $1 billion).

Once the investment community finds out about Lynden, it's a good bet that their market cap will approach the numbers that others are getting for comparable land. This means that Lynden has the chance to increase by 10X!