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DJ BASIN WATERFLOOD FOR SALE

Producing Properties

All Standard Disclaimers Apply & Seller Rights Retained


DJ BASIN WATERFLOOD FOR SALE

NORTHERN DJ WATERFLOOD

11-Total Wells. ~3,500-Gross Acres

BANNER, CO., NE & LARAMIE CO., WY

J1, J2 & J3 DAKOTA SANDS

New Waterflood In Response

16-Successful Offset Waterfloods

SOLID DEVELOPMENT OPPORTUNITY

100% OPERATED WI; 82% NRI

Gross Production: 44 BOPD

Net Production: 36 BOPD

Net Cash Flow: ~$31,900/Mn

Cash Includes 2.0%-6.4% Overrides

SOLD BY ENERGY ADVISORS IN 1Q19

PP 8305DV

Updates:
12/07/18: 07. Well Data folder added to Confidential section of VDR.

Summary:
Deluca Holdings, LLC is marketing their operated DJ basin waterflood assets located in Laramie County, Wyoming and Banner County, Nebraska. This sale package includes 11-total wells (7-PDP, 3-PDNP & 1-Active injector) spanning 3,488-gross acres (3,413-net acres) including the ~950-acre Palm Unit in Banner County, contract operated by Bellaire Oil Co. Deluca holds 100% operated WI and 83.9% NRI in the 6-well unit producing from the J1 Dakota sands.

The Palm Unit is a new waterflood that utilizes J1, J2 & J3 produced water for the J1 waterflood thereby mitigating the risk of foreign fluid contamination and prolonging the life of the well bores. Deluca spent approximately $600,000 implementing this new flood on the Palm Unit. Costs include unitization, drilling and completing the Palm 31-20, converting the Palm 21A-20 to injection and installing injection facilities with associated flowlines. Water injection started during the Fall of 2015, making this an immature waterflood. During the past 6 months, the field has exhibited an extremely positive response to the flood. Oil production is up 89% since February 2018 (11.5% average monthly increase) and the water cut has remained constant at 5% since injection began. Based on Ranch Oil’s analysis of 9 J Sand waterflood analogues, management believes that the Palm Unit’s production rate will peak within the next 12-24 months between 71-142 BOPD and stabilize for a five year period. 7 out of the 9 J Sand analogues were success-fully stabilized with rate increases over 200% and continued to decline as expected. MHA, an unbiased third party engineering firm believes there will be future opportunities to drill additional producing wells and 1-2 additional injection wells since the J1 pressure response has been so evident. During the month of October 2018, The Palm unit produced 1,050 bbls (34.5 BOPD).

Also included in this sale is the Stateline field (3-PDP & 2-PDNP) where Deluca owns 100% operated WI and 79% NRI in all but one well. Gross production during August, 2018 was 13 BOPD and 10 BOPD net.

Both fields combined are currently generating a 3-month average net cash flow of $31,921 per month.

TO LEARN MORE CONTACT:
Energy Advisors Group
Mr. Blake Dornak
A&D Associate - Rockies/Permian
5120 Woodway Dr Ste 11010
Houston, TX 77056

Phone: 713-600-0169
Cell: 903-390-6803
Email: [email protected]

Questions Regarding This Asset? Email Blake Dornak or call EAG at 713-600-0123
Virtual Data Room

NORTHERN DJ WATERFLOOD

11-Total Wells. ~3,500-Gross Acres

BANNER, CO., NE & LARAMIE CO., WY

J1, J2 & J3 DAKOTA SANDS

New Waterflood In Response

16-Successful Offset Waterfloods

SOLID DEVELOPMENT OPPORTUNITY

100% OPERATED WI; 82% NRI

Gross Production: 44 BOPD

Net Production: 36 BOPD

Net Cash Flow: ~$31,900/Mn

Cash Includes 2.0%-6.4% Overrides

SOLD BY ENERGY ADVISORS IN 1Q19

PP 8305DV

Updates:
12/07/18: 07. Well Data folder added to Confidential section of VDR.

Summary:
Deluca Holdings, LLC is marketing their operated DJ basin waterflood assets located in Laramie County, Wyoming and Banner County, Nebraska. This sale package includes 11-total wells (7-PDP, 3-PDNP & 1-Active injector) spanning 3,488-gross acres (3,413-net acres) including the ~950-acre Palm Unit in Banner County, contract operated by Bellaire Oil Co. Deluca holds 100% operated WI and 83.9% NRI in the 6-well unit producing from the J1 Dakota sands.

The Palm Unit is a new waterflood that utilizes J1, J2 & J3 produced water for the J1 waterflood thereby mitigating the risk of foreign fluid contamination and prolonging the life of the well bores. Deluca spent approximately $600,000 implementing this new flood on the Palm Unit. Costs include unitization, drilling and completing the Palm 31-20, converting the Palm 21A-20 to injection and installing injection facilities with associated flowlines. Water injection started during the Fall of 2015, making this an immature waterflood. During the past 6 months, the field has exhibited an extremely positive response to the flood. Oil production is up 89% since February 2018 (11.5% average monthly increase) and the water cut has remained constant at 5% since injection began. Based on Ranch Oil’s analysis of 9 J Sand waterflood analogues, management believes that the Palm Unit’s production rate will peak within the next 12-24 months between 71-142 BOPD and stabilize for a five year period. 7 out of the 9 J Sand analogues were success-fully stabilized with rate increases over 200% and continued to decline as expected. MHA, an unbiased third party engineering firm believes there will be future opportunities to drill additional producing wells and 1-2 additional injection wells since the J1 pressure response has been so evident. During the month of October 2018, The Palm unit produced 1,050 bbls (34.5 BOPD).

Also included in this sale is the Stateline field (3-PDP & 2-PDNP) where Deluca owns 100% operated WI and 79% NRI in all but one well. Gross production during August, 2018 was 13 BOPD and 10 BOPD net.

Both fields combined are currently generating a 3-month average net cash flow of $31,921 per month.

TO LEARN MORE CONTACT:
Energy Advisors Group
Mr. Blake Dornak
A&D Associate - Rockies/Permian
5120 Woodway Dr Ste 11010
Houston, TX 77056

Phone: 713-600-0169
Cell: 903-390-6803
Email: [email protected]

Questions Regarding This Asset? Email Blake Dornak or call EAG at 713-600-0123