Elk River - Resources Permian Divestiture 2017

Overview

Andrews County Package

  • ~9,290 net acres (majority 100% WI) in Andrews County offsetting strong well results by Apache
  • Position ideally suited for active development given its largely contiguous footprint
    • Elk River is preparing to spud two horizontal wells later this year
  • Favorable structural position and thick hydrocarbon column benefit development of multiple reservoirs (San Andres, Clear Fork, Wichita-Albany, etc.)
    • ~125 locations in development plan with attractive economics
      • Cash flow positive beginning in 2019
      • Low D&C costs of $2.8 million for a 7,500' lateral Wichita-Albany well
    • Additional upside in the deeper Devonian, Ellenberger, and Woodford formations
  • Elk River development to date has focused on the Upper Wichita-Albany
  • Current net production of ~165 boe/d (March 2017); 79% oil
  • Initial infrastructure in place with limited additional build required
    • Current water production disposed of in Elk River owned SWD well

Cochran Country Package

  • ~4,650 net acres (6,200 gross) in southern Cochran County surrounded by prolific legacy fields
  • Emerging San Andres ROZ play provides a highly economic target with its low D&C costs and potential for efficient operations
    • Active development to date offsetting Elk River's acreage; approximately 75% of acreage can be held with a one rig program
    • Benefits from structural and stratigraphic trapping mechanisms
  • Position adjacent to active development by Steward, Element, and Custer& Wright
  • High working interest (75%) and contiguous footprint provide operational control for efficient development with existing JOA in place

Contacts

Please email the signed Confidentiality Agreement to elkriver.permian@bmo.com

Contact Chelsea Neville at +1 713-546-9703 or any of the above individuals with questions.