DJ Basin Acquisition | Russell T. Rudy Energy LLC
“World Oil” reports that U. S. Energy Corp., has agreed to buy 40% of Iron Horse Resources’ farmout to develop three core areas of the Denver Julesberg (DJ) basin’s Wattenberg field, in Weld County, CO. Under the terms of the agreement, U. S. Energy will acquire a working interest and commits to drilling 21 horizontal wells in the A, B, and C benches of the Niobrara and Codell formations.
The DJ basin is in Northeastern CO, and Southeastern WY. The Wattenberg field was discovered in 1970, and is one of the 15 largest gas developments in the country. U. S Energy thinks that at an oil price of $47 per barrel, and $2.78 per MCF for gas, the deal offers attractive economics. The company anticipates an investment of approximately $9.6 billion in drilling and completion costs. Operations will begin later this year and extend into 2017. It expects this outlay to generate $4.9 billion in revenues in each of the next two years, and increase reserves by 43%.
The transaction is seen as part of the U. S. Energy’s effort to focus solely on its ongoing oil and gas operations. Consistent with this strategy, the company has reduced overhead costs and moved its corporate headquarters to Denver for better access to financing and deal flows.
To read the article in its entirety, please go to http://www.worldoil.com/news/2016/7/7/us-energy-corp-to-acquire-interest-in-dj-basin-developments .
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