Page 9 - NorthAmOil Week 04 2023

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HighPeak to explore sale of company

PERMIAN BASIN HIGHPEAK Energy will explore a potential sale scarcity of premium undeveloped inventory in
of the company, it has announced. The move is the Permian Basin, HighPeak said it had iden-
aimed at maximising shareholder value, the Tex- tified 2,500 total locations, including roughly
as-based, oil-oriented producer said. 1,300 delineated primary locations that have a
“The board and I believe now is an opportune projected average return of 95% at flat prices of
time to capture the value we do not consider is $90 per barrel of West Texas Intermediate (WTI)
presently reflected in our share price,” High- and $4 per million British thermal units ($110.64
Peak’s chairman and CEO , Jack Hightower, per 1,000 cubic metres) of Henry Hub gas.
said. “We have worked diligently over the last The company said that its production was HighPeak said
few years to secure this position and are poised more than 90% liquids and, based on public
to capitalise on the favourable energy market data, its margins were the highest of any pure- that it anticipates
outlook.” play Permian Basin public company.
Hightower added: “There can be no assur- HighPeak’s primary inventory locations having self-
ance that any evaluation will result in one or alone are expected to provide more than 14 years
more transactions or other strategic change or of activity at a four-rig pace, which is what the sustaining
outcome. The company has not set a timetable company projects will be needed to maintain operations and
for the conclusion of its evaluation of strategic its estimated 2024 production level of around
alternatives.” 75,000 barrels of oil equivalent per day (boepd). becoming cash
HighPeak said that many investors remained “We believe our current acreage position of
“unfamiliar” with the extent of de-risking that approximately 110,000 acres [445 square km], flow positive in
had occurred in the eastern Howard County consisting of two highly contiguous blocks, is
area of the Permian Basin’s Midland sub-basin configured optimally for efficient development,” the second half
in Texas. said HighPeak. “From the beginning, we had the of 2023.
There are currently 11 oil and gas companies long-term goal to both develop this acreage to
running 21 rigs in Howard County, with more maximise our returns and to minimise future
than 1,600 completions in the last three years, infill, parent-child related issues.”
according the company. Based on its forecast, HighPeak said that it
HighPeak has successfully drilled 215 hori- anticipates having self-sustaining operations and
zontal wells across the Wolfcamp and Spraberry becoming cash flow positive in the second half of
formations since its inception. 2023 and then transitioning into consistent free
Despite an economic backdrop of increasing cash flow (FCF) generation.™

Week 04 26•January•2023 www. NEWSBASE .com P9