________________________________________________________________________________________________________________________
Permian Basin assets, which we continue to develop today along with our D-J Basin assets. These properties serve as our core assets and provided 1,729 barrels of oil equivalent per day of production over the first 9 months of 2024.”
Horizontal drilling
The company’ s Permian Basin asset currently consists of approximately 14,550 net acres, substantially all held by production with over 100 additional drilling locations, situated in the Chaveroo and the Chaveroo NE fields in the northwest shelf of the Permian Basin, which are legacy oil fields that have produced over 49 million barrels of oil equivalent to date from the San Andres formation via 40-acre vertical well spacing. By applying modern horizontal drilling and completion techniques and down spacing to 20-acre infill drilling locations, the company has realized significantly better recoveries and achieved lower development costs than can be achieved through traditional vertical development. The company has drilled 18 horizontal wells since 2019 on its Permian Basin asset.
Mr. Schick continues,“ With one horizontal well in the Permian Basin, we unlock the reserves of roughly eight vertical wells. Horizontal development is currently our primary focus in the Permian. To accelerate development of this asset, in late 2023 we brought in a partner, Evolution Petroleum, to buy 50 percent of all future development on this project. Not only does this help accelerate the development of our Permian Basin asset, but it allows us to allocate funds to further develop our D-J Basin asset.”
The company’ s D-J Basin asset consists of approximately 19,500 net acres, approximately 60 percent held by production with over 150 additional drilling locations, situated in Weld and Morgan Counties, Colorado, and Laramie County, Wyoming. The company operates 17 wells and has a working interest in 69 wells. The acreage offsets prolific and exceptional recent production performance by some of the largest and most successful operators in the Basin, with increasingly greater production rates and higher reserves being achieved as improved drilling and completion designs and techniques are applied.
“ In the last two years, we’ ve been focusing our acquisition and leasing efforts in the D-J Basin in an effort to expand our position there because the economics are superior to other opportunities we have evaluated,” Mr Schick reveals.“ Consistent with this effort, the company recently announced entry into a five-year participation agreement and area of mutual interest( AMI) with a large private operator where they own 70 percent, and we own 30 percent. This is an excellent opportunity as this acreage was not in the company’ s five-year development plan, and now positions the company to significantly accelerate the development of its D-J Basin asset. The deal requires the operator to drill a minimum of five wells per year, but the
66