Total asset valuation could reach $150M, say analysts
Resolute Energy Corp. (NYSE: REN), a Denver, Colorado-based independent oil and gas company, plans to market Powder River Basin properties as it looks to sell non-core assets to reduce leverage and enhance liquidity.
Petrie Partners LLC has been retained to market for sale the Hilight Field property located in the Powder River Basin of Wyoming that the company acquired in 2008. The asset includes Q1:15 production of 1,725 boepd, proved reserves at 12/31/14 of 5.9 MMboe (80% developed, 28% oil, 24% NGL, 48% gas), proved PV-10 of $76MM (based on $91.48/bbl WTI and $4.35/Mcf) and 45.4K net acres, noted analysts with Global Hunter Securities after the announcement.
Resolute Energy operations in Wyoming. Resolute Energy photo.
Resolute shifted field activity from enhanced oil recovery to horizontal drilling in the Turner and Parkman formations. The three horizontal Turner wells drilled to date have garnered 30-day IP rates of 885 boepd (86% oil), 304 boepd (84% oil) and 425 boepd (85% oil), the analysts detailed.
“We estimate that current production of 1,725 boepd (10.4 MMcfepd) could be worth $52MM-$72MM at production multiples of $5K/Mcfepd-$7K/Mcfepd. REN estimates 77 gross (65 net) horizontal drilling locations in the Turner and Parkman, which we estimate could be worth ~$80MM with a one-rig program at current strip type prices. This results in a total potential valuation for the asset of approximately $130MM-$150MM,” they continued.
Resolute noted also that the company has regained compliance with the NYSE’s continued listing standards. In February, the company received notification from the exchange after the price of Resolute's common stock fell below NYSE's continued listing standard. The NYSE requires that the average closing price of a listed company's common stock be above $1 per share over a consecutive 30-trading-day period.