Page 14 - NorthAmOil Week 27 2022

NorthAmOil NEWS IN BRIEF NorthAmOil

Significantly increases magnitude of expected
Free Cash Flow generation while maintaining
timing of consideration of shareholder return
programme.
Robert J. Anderson, President and CEO of
Earthstone, commented: “The Titus Acquisi-
tion continues our path of building scale in the
Permian Basin, increasing our daily production
to around 100,000 boepd upon closing. We had a
goal of adding to our recently established North-
ern Delaware Basin position and are excited
about this transaction and the drilling inven-
tory we are acquiring as it is among the highest
economic locations in the Permian Basin. We
continue to pursue synergies from the two acqui-
sitions completed since the beginning of 2022. In
particular, we are very pleased with the execu-
tion of our operations in the Northern Delaware
Basin assets acquired earlier this year and expect
to apply that knowledge to the Titus Acquisition
assets after closing. We have continued to build
out our high margin asset base, which is gener-
ating significant Free Cash Flow to which this Titus Oil & Gas Production II, LLC and those of an area where the Shelf Margin Delta (SMD),
acquisition will contribute in a meaningful way. their applicable affiliates have also unanimously Slope Fan Set (SFS) and Basin Floor Fan (BFF)
“As we have continued to demonstrate from approved the Titus Acquisition. play fairways have been independently mapped
prior acquisitions, we believe that the price for Earthstone Energy, June 28 2022 (by Jordan & Pay) on the Icewine East acreage.
this acquisition is highly attractive, with our abil- The FB3D data will assist the Company
ity to buy the assets at less than 2x PDP cash flows through subsequent analysis and review, includ-
using current NYMEX strip prices. We are also PROJECTS & COMPANIES ing Amplitude-variation-with-offset analysis
obtaining six wells in progress and 86 potentially (AVO analysis) and simultaneous seismic inver-
highly economic net locations which will be Stena Drilling signs sion, in defining ‘sweet spots’ for each play and
incorporated into our drilling plans as quickly as hence determine optimal drilling locations for
possible. The combination of the attractive price contract with BP for future exploration and appraisal wells. In addi-
being paid, the current high level of commodity tion, the FB3D will provide key data for potential
prices and production of the acquired assets will Stena Icemax to drill farm-out partners to assess as part of their due
allow us to acquire the assets utilising primar- diligence programme.
ily debt funding while having only a minimal offshore Canada Project Icewine East: The FB3D seismic data
impact on leverage. We expect this to increase is to be used to further mature the conventional
our 4Q 2022 Debt / LQA Adjusted EBITDAX Stena Drilling has signed a new Contract with prospectivity of the Project Icewine East acre-
by only 0.1x while remaining below our targeted BP Canada Energy Group for Mobile Offshore age, where it is anticipated that it can confirm
1.0x leverage ratio at year-end 2022. The mod- Drilling Unit (MODU) Stena IceMAX. the prospectivity already identified and mapped
erate levels of expected leverage and significant The one-well programme, scheduled for on 2D seismic data. Importantly, future drilling
incremental Free Cash Flow further strengthens 2023, will be off the coast of Newfoundland locations in the Icewine East acreage will be sup-
our outlook in 2023, while positioning us to con- (Canada) and has an estimated duration of 80 ported by AVO analysis, which is often used as a
sider implementing a shareholder return plan as days. qualitative exploration tool. AVO responses can
we look into 2023.” Stena Drilling are delighted to secure this be associated with the presence of hydrocarbons
The consideration for the Titus Acquisi- scope with BP and look forward to working with in good quality reservoirs; an association which
tion consists of approximately 3.9mn shares of bp to complete this campaign. becomes more reliable when calibrated to actual
Earthstone’s Class A common stock to be issued Stena Drilling, July 07 2022 fluid content (hydrocarbons) and log data from
to Titus, which will represent 3% of total Class nearby wells. It is also worth noting the success
A and Class B common stock on a pro forma 88 Energy provides update that Pantheon has had in utilising its 3D data to
basis and a cash amount of $575mn based on locate Alaskan exploration and appraisal wells.
the effective date (subject to customary closing on Icewine East and 88 Energy is targeting a similar or better out-
adjustments). come from its use of the FB3D data.
Earthstone intends to fund the cash portion Longhorn projects 88 Energy’s initial license fee includes $1.0mn
of the consideration and fees and expenses with in fully paid new ordinary shares in 88 Energy
cash on hand and incremental bank borrowings. 88 Energy has signed a licensing agreement with (approximately 181mn shares at an issue price
The Company has received $400mn in increased SAExploration, Inc. for the use of SAE’s FB3D of A$0.008 per share, being the closing price of
commitments from existing lenders. seismic data. 88 Energy shares on the ASX on 24 June 2022).
Approvals: The board of directors of Earth- The FB3D seismic data was acquired in 2015 88 Energy is currently in the process of plan-
stone has unanimously approved the Titus by SAE and covers approximately 86 square ning its operations in 2023, which is expected to
Acquisition. The board of directors and mem- miles, predominantly over the Icewine East acre- include an exploration well to be drilled in the
bers of Titus Oil & Gas Production, LLC and age. More importantly, the FB3D extends across Icewine East acreage.

P14 www. NEWSBASE .com Week 27 07•July•2022