
Week of February 20, 2012	Volume 2, No. 10

Permian Rocks! Profits, Old Plays and New Plays

Spraberry, Strawn, Atoka, Wolfcamp, Wolfberry, Avalon, Bone Springs, Cline and More!

PXD : 2 Wells per Day!

February 8, 2012

With oil selling north of $100/bbl through May 2014, over 1,500 operators in the Permian basin are laser focused on extracting more from the ground. The oil is "in place" and today's industry talent and tools are actively extracting more. Everything is in play including new plays, infilling traditional vertical plays, secondary and tertiary recovery operations.

This docFinder Alert highlights just a few Permian operators including Pioneer Natural Resources, Forest Oil, Occidental, Range Resources, Cimarex, Energen and BHP.

Above, Pioneer Natural Resources is blessed with a legacy, large and profitable Spraberry position (with 609 MMboe of reserves) that drives corporate level oil production growth and the stock price to recent all-time highs. In 2012, PXD will be drilling over 2 wells per day. Pioneer will start the year at 41 vertical and 3 horizontal rigs with the mix changing over to 30 vertical and 7 horizontals by year-end. PXD's focus beyond the Spraberry is the Wolfcamp oil shale where its first two step out wells (60 miles NW of industry) exceeded expectations.

Also, Forest Oil's shows its competitive position in the Wolfcamp (51,500 net acres in Crockett County) -- before buying another 63,500 net acres in the Wolfbone in Pecos and Reeves counties announced last Thursday, February 16. In the Wolfcamp (shown above), Forest entered the play in early 2011 for less than $1,000/acre and prices recently are $5,000+ per acre. Now with both the Wolfcamp (Midland basin) and Wolfbone (Delaware basin), Forest has 114,500 net acres and 2,000 gross prospective drilling locations.

Did you know?

Oil company execs, investors and bankers know full well the value of "competitive reconnaissance." PLS' new docFinder database is a valuable source to stay current on industry and company developments. DocFinder collects, archives and uniquely catalogues industry presentations and provides clients with great features for searching, finding, collaborating and communicating a wealth of data.

Start your free trial to docFinder today!

featured.slides from docFinder

OXY: Largest Producer February 7, 2012	Range: Cline Oil Shale February 21, 2012	Cimarex : 438,000 Acres February 15, 2012	ERC/BHP Option Acres February 22, 2012
Occidental is the largest oil producer in the Permian with a ~ 15% net share (~ 200,000 boe/d) and the largest of some 1,500+ operators. Currently about 64% of this oil is from CO2 projects (injecting 1.7 Bcf/d). In 2012, OXY plans on spending over $1.6 billion in capital in the Permian and expects to ramp its rig count from 23 to 27 rigs. Included in this program is extensive Wolfberry drilling as well as Delaware/Bone Springs sand and the Avalon shale.	Range Resources (among others) are now publicly detailing a new Permian play -- the Cline oil shale in the Midland basin. In the play, Range holds 100,000 net acres (91% HBP). Range shows Cline economics to yield 41% IRR's. Inputs are: EUR of 340 Mboe (210 Mbbls oil, 210 MMbbls liquids, 353 MMcf gas), D&C costs of $4.3 million and pricing based 1/31/12 strip with 10-year avg. of $93.26 oil, $4.63 gas. This results in a per well NPV10 of $3.7 MM.	Cimarex is allocating 52% of its $1.5 billion 2012 capital budget to the Permian basin and expects oil production growth to accelerate reaching 21 to 22 Mbbl/d. XEC holds 438,000 net acres and has multiple Delaware basin projects. In the Bone Springs, XEC drilled 54 wells in 2011 with very recent positive results in New Mexico's Lea and Eddy counties. Also in Lea County, encouraging results from Avalon. XEC also has drilled 18 wells in the Wolfcamp.	Above is a lone slide by Energen presented in conjunction with its deal announced yesterday that could lead to a JV on 56,549 net acres primarily in Reeves County, Texas in the Delaware sub-basin of the Permian basin. Should BHP exercise its option, Energen expects to recover 100% of its cost (~$100 MM) to buy the acreage while still maintainng a 50% interest. The first part of the deal calls for BHP to buy 50% in three existing wells for $18MM.
Full Presentation	Full Presentation	Full Presentation	Full Presentation
docFinder allows you to identify key players in key plays...	docFinder allows you to find inputs for well or play economics...	docFinder allows you to identify play boundaries..	docFinder allows you to find deal maps and deal details...

featured.transactions from PLS global M&A database

Date	Headline	Value
02/21/12	Energen sells BHP interests in Delaware basin wells plus JV option on 51K acres	$18 MM
02/17/12	Magnum Hunter pays $2,035/acre for Utica in Noble County, OH	$25 MM
02/16/12	Forest pays $1,600/acre for Wolfbone in Pecos, Reeves counties, TX	$103 MM
02/11/12	Antero pays $5,900/acre for Utica in Monroe, Belmont, Noble counties, OH	$112 MM

Source: PLS M&A Database

Permian Rocks! Profits, Old Plays and New Plays

Spraberry, Strawn, Atoka, Wolfcamp, Wolfberry, Avalon, Bone Springs, Cline and More!

PXD : 2 Wells per Day!

Full Presentation

FST : Wolfcamp

Full Presentation

featured.slides from docFinder

OXY: Largest Producer

Range: Cline Oil Shale

Cimarex : 438,000 Acres

ERC/BHP Option Acres

featured.transactions from PLS global M&A database