The Assets
A substantial position in the core of the Tuscaloosa Marine Shale (TMS), with existing production and associated acreage already Held By Production, along with a significant future development inventory.
What are the assets that are being acquired?
The net acreage being acquired in the core of the TMS comprises:
● 22,000 net acres already HBP status (HBP core acres)
● 40,000 net acres within core and in Permitted Drilling Units (focus core acres)
● a further 60,000 net acres in core not formed in drilling units (non-focus core acres)[Read more]
There is existing production from the acquisition acreage which as at the effective date of the acquisition being 1 November 2016 was producing at the rate of ~1,900 bbls/day. Independent assessment of the Proved, Developed and Producing (PDP) reserves as at 1 February 2017 was 5.0 mmbbls with a pre tax Net Present Value, at a 10% discount rate, of US$95 million.
The acquisition comes with a large inventory of potential future locations at 250 acre/well spacing, total inventory of 215 potential future well locations, this is considering the non-developed HBP core acres and the focus core acres. Significant additional acreage (the non-focus core acres) could significantly increase these recoverable estimates. [Read more]
The map below shows the existing Australis position in yellow and the acquired Encana position in blue. The dotted line designates the core area of the play that has been consistent since prior to our IPO. The red well locations are those that Encana presently operate, the green are those within which Encana has an interest but is not the operator and the grey wells are those within which Encana has no interest.
