Black Mesa ( who are 15% owned ) by BRK are selling their interest in the Roser well.
It looks like BM agreed to participate in the well and are now selling their interest ( and their drilling liability to the operator) for a quick cash injection.
Interestingly, the lease owners who elected not to participate in the well were to be paid between $1500 and $6400 per acre depending on the royalty agreed to. Looks like this is how BRK managed to increase their holding in the unit.
This is a 640 acre drilling unit. BRK originally had a NWI of 3.95% which meant they had around 25 net acres in this drilling unit . They increased their NWI to 8% which means they acquired another 26 net acres for which they paid anywhere for US$ 39000 to US$ 166000.
The estimated cost to complete this well was US$ 10.6 million so all up it looks like BRK spent over US $ 1 million to acquire the leases and drill the well.
The value of the merchant drilling JV is highlighted here because there is no way BRK could have spent this sort of money outright on one well , let alone 27 without massively diluting the equity base.
www.conveyenergyok.com/currentlistings-details/blackmesa-roser
Cheers
Dan
Add to My Watchlist
What is My Watchlist?
