Eagle Energy Trust announced that they have entered into an agreement to acquire a 92.5% interest in 3,175 gross (2,937 net) acres of land near Midland. The purchase price is $113.4 million which equals a transaction price of $38,600/acre!
The asset includes 600 boe/d of production as of March and the company expects production to be approximately 1,000 boe/d by the end of 2012 (sound familiar...) Estimated proved plus probable reserves is approximately 10.2 mmboe.
"These long life, high netback assets represent a solid, low risk entry-point for Eagle into one of the most prolific and well-established oil weighted basins in North America. We believe that the Permian Basin will form a new strong core area of future operations for Eagle. It is one of North America's most productive oil-weighted basins and has demonstrated, on a recurring basis, the addition of new reserves horizons and enhanced exploitation of existing horizons in the multi-zone stacked pay resource," says Richard Clark, President and CEO of Eagle Energy Trust.
As a comparison, on April 4 Lynden Energy Corporation announced over 500 boe/d after royalty net production and has estimated end of 2012 production of approximately 1,000 boe/d. Most of this production is located within their West Martin and Wind Farms Wolfberry projects where Lynden owns 3,841 net acres and has 9.8 mmboe of proved plus probable reserves as of 6/30/11. The Eagle Energy Trust asset acquisition has very similar numbers to Lynden's West Martin and Wind Farms projects. Should one value Lynden's West Martin and Wind Farms acreage on a similar acreage metric as the Eagle Energy transaction, those lands alone would be valued at approximately $148 million which far exceeds the company's current market cap. After adding in Lynden's Tubb and Mitchell Ranch acreage, one can conclude that Lynden has incredible potential.