ERG Resources LLC

ERG Resources LLC retained Houlihan Lokey Capital Inc. to sell oil and gas producing properties, undeveloped acreage and related assets located in the Cat Canyon and Casmalia oil fields within the Santa Maria Basin in Santa Barbara County, Calif.

ASSET ATTRIBUTES

Concentrated acreage position with high working interest and operatorship

• 18,769 contiguous net acres, 18,960 gross
• ~99.9% working interest; 100% operated
• Largely undeveloped

Numerous stacked-pay intervals, including thermal and non-thermal target zones

• Shallow reservoirs with high porosity and permeability, 34% and >1,000md, respectively; ideal for high thermal EOR efficiency
• Primary formations include the Sisquoc and Monterey
• 637MMbo total OOIP (excluding Monterey)
• Thermal operations expected to achieve recoveries of 30%-50% of OOIP contingent upon recovery method

Significant and scalable resource base primed for low-risk development

• Current production of ~2,600 boepd gross / ~2,158 net (~92% oil) from ~130 PDPs
• Existing facilities accommodate up to 7,000 bopd
• 95 re-drill wells are fully permitted and ready for immediate development
• An additional 233 PUDs are mapped and close to receiving permit approvals
• An additional >1,500 undeveloped locations are available for long-term development

Valuable upside potential

• Individual wells achieve greater than 100% IRRs
• Net production projected to peak at ~47,000 bopd by 2027
• Development plan achievable with minimal outspend

Bids are due May 24. For information visit hl.com or contact Kirk Tholen, managing director and head of E&P A&D, at KTholen@HL.com or 832-319-5110.