University Land Sale nets $249.8 million

The latest University Land Sale netted $249.8 million for 103,667 acres in West Texas. Most of that land lies in the Wolfbone and Wolffork plays in the Permian Basin. These leases equal over $2,400/acre. This is a great sign that companies are still willing to pay top dollar for unproven Permian Basin land.

Approach Resources announces update on Wolffork

Approach Resources released their 2010 reserves and an update on the Wolffork today. They are encouraged by their Wolffork wells. Their average IP’s from vertical wells in the Wolfberry are 50 Boe/d to 75 Boe/d. Approach has seen an almost 500% increase in their stock price in the past year mainly attributable to their success in the Wolfcamp shale.

Lynden Energy's Wolfberry wells are getting much better results than this and demonstrate the quality of their land and ability of their operator to successfully complete Wolfberry wells.

Nice uptick in LVL's price and volume today

Lynden Energy Corp. (LVL) has seen increased volume and an uptick in price the last few days. Cannacord purchased over 70,000 shares just prior to market close. Wolfberry and Wolffork are starting to attract a lot of attention!

Approach Resources Acquires 10,900 Wolffork acres

Approach Resources Inc. announced that it has acquired 10,900 net acres in the Wolffork oil shale play (click here to view the release). Approach Resources has recently highlighted the play during their investor and analyst meetings and attracted the attention of Cannacord Genuity. Cannacord said that "we are very encouraged by the company’s recent Wolffork test results."

This type of attention drawn to the Wolffork and Wolfberry shale plays should benefit Lynden Energy Corp. Lynden is expected to release results from their three new Wolfberry wells shortly.

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.

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!

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.