Marketed: Pony Oil Operating Delaware Minerals Acquisition Opportunity

The following information is provided by Detring Energy Advisors LLC. All inquiries on the following listings should be directed to Detring. Hart Energy is not a brokerage firm and does not endorse or facilitate any transactions.

Pony Oil Operating LLC retained Detring Energy Advisors to market for sale its oil and gas mineral and royalty interests located throughout New Mexico’s Lea and Eddy counties in the Delaware Basin.

The assets, according to Detring, have exposure to best-in-class operators focusing significant horizontal activity on Pony’s footprint with next 12-month cash flow of roughly $2.5 million including near-term uplift from about 650 recent DUCs/permits. The offering also includes over 1,800 additional undeveloped locations throughout four horizons described by Detring as the most productive and economic horizontal targets in North America.

Highlights:

• Compelling portfolio of 498 Net Royalty Acreage (68% Lea | 32% Eddy) offers statistical, cost-free exposure to the highest-returning basin being developed by top operators (EOG Resources, Occidental Petroleum, Marathon Oil)
  • 20 rigs within 1 mile of the ~61,000 gross acre footprint
  • ~92% of Net Royalty Acreage have all depths to capitalize on substantive stacked pay development
  • Position overlays the most active, overpressured core of the highest-returning basin in the Lower 48
• Imminent Development Bolsters Stout Cash Flow of ~$2.5 million
  • Robust operator activity results in rapid growth underwritten by recent DUCs (75) and permits (567)
  • 419 producing wells provide stable cash flow base and well-distributed PDP value
    • Net Production: 182 boe/d (~70% oil)
    • PDP PV-10: $4.1 million
  • With DUCs contributing ~30% of next 12-month cash flow, the opportunity strikes an attractive balance between asset maturity and development growth
  • Substantial on-mineral and offsetting rig activity points to strong continued growth beyond line-of-sight DUCs and Permits
• ~1,800 Highly-Economic Undeveloped Locations
  • Single well results of 240 boe/d/Mft IP (average) and average IRRs of well in excess of 100% for all major targets continue to prove repeatable resulting in the locations being high-graded for development in respective operator inventory
    • 3P PV-10: $24 million ($74 million PV0)
    • 3P Net Reserves: 2.4 MMboe 
  • Average thickness totals >2,000 ft across multiple highly economic Bone Spring and Wolfcamp horizons
  • Operators consistently developing 20-30 wells per mile in the area (and on-minerals), establishing the tremendous resource concentrated underlying Pony’s position

Process Summary:

• Evaluation materials available via the Virtual Data Room on July 26
• Proposals due on Aug. 25

For information visit detring.com or contact Melinda Faust at mel@detring.com or 512-296-4653.