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  • U.S. Energy Is The Way To Play The Buda Oil Discovery [View article]
    The recent results are outstanding. To follow the production profile of the Buda wells I recommend going to the Investor Village message board for USEG. They have a group of people that post regularly and keep everything up to date.

    The last four wells Contango drilled on the lease have been home runs. The Beeler 17H started producing in June and by the end of July it had already reached payout. They plan to start drilling longer 9,000 foot laterals from here on out. Many of their earlier wells had laterals that were less than 4,000 feet.

    USEG is a steal at current prices. The market hasn't figured out how rapidly production is rising for them from the recent success in the Buda.
    Sep 19 03:39 PM | Likes Like |Link to Comment
  • Chesapeake Joining Buda Oil Rush In South Texas [View article]
    Let me illustrate the $500 million estimate. The Dan Hughes Heitz 302 3H well has been producing for two full years:

    Estimated Gross Revenue: $35.00 million

    Less 25% Royalty 8.75
    Less 4.6% Production Tax 1.61
    Less 5% Operating & Transportation 1.75
    Less Est. $4 million Drilling Cost 4.00

    PV-10 for Production to date: $18.89 million

    PV-10 Estimate for future Production 6.00

    Total PV-10 for Heitz 302 3H well $24.89 million.

    It would take 20 very good wells like this well to have a PV-10 value of $500 million. The gross acreage position on the Booth-Tortuga lease is over 14,000 acres. With 320 acre well spacing the lease contains over 40 drilling locations. So far Contango and USEG have hit 8 good wells and 5 so-so wells. They also have the drilling costs down to $2.6 million.
    Sep 18 10:20 AM | 1 Like Like |Link to Comment
  • Chesapeake Joining Buda Oil Rush In South Texas [View article]
    The $500 million is just for the Buda formation for the whole lease. The most recent well results indicate it could wind up much higher than that. USEG has a 30% working interest and their share would be worth $150 million.

    That doesn't count the Austin Chalk or the Eagle Ford. The Austin Chalk has the potential to be as productive as the Buda. There are already older Austin Chalk wells on the lease that are still producing.

    It also doesn't count the K.M. Ranch lease or the new Dimmit operator they are working with. It is not presently known if either of those leases are in a sweet spot.

    USEG also has Bakken leases and producing wells yielding over 600 boepd.
    Sep 18 08:57 AM | 2 Likes Like |Link to Comment
  • Buda Oil Well Rates Of Return Better Than Eagle Ford [View article]
    The EUR for the Jessica well could be over 500K BOE.
    Sep 12 09:43 AM | Likes Like |Link to Comment
  • Chesapeake Joining Buda Oil Rush In South Texas [View article]
    The map shows how close the Jessica well is to the drilling locations for Contango (MCF) and U.S. Energy (USEG). The Jessica well may have an EUR over 500,000 BOE. The decline curve looks similar to the results for the Heitz 302 3H well drilled by Dan Hughes. That well is closing in on 400,000 BOE after only two years of production and is still going strong.

    These results indicate the PV-10 value for the Buda for the entire Booth-Tortuga lease could be in excess of $500 million.
    Sep 12 09:42 AM | Likes Like |Link to Comment
  • Buda Oil Well Rates Of Return Better Than Eagle Ford [View article]
    Thanks for posting this. The Jessica well was spud on March 3, 2014. By the end of July the working interest owners of the Jessica well had already roughly doubled their money.

    The map shows just how close many of the Contango (MCF) and U.S. Energy (USEG) drilling locations are to the Jessica well.

    Based on the Buda oil well results to date, it is pretty clear the Booth-Tortuga lease is worth several hundred million dollars. A windfall for MCF and a company maker for USEG.
    Sep 12 09:01 AM | Likes Like |Link to Comment
  • Buda Oil Well Rates Of Return Better Than Eagle Ford [View article]
    It's possible, but it has not been tested. The K.M. Ranch lease you reference is near Matador's Glasscock lease. Matador has run 3D seismic and believes their lease could have natural fractures in the Buda.

    The lease is near the Pearsall Anticline, which is a major fault line. Dan A. Hughes Oil Company in papers filed with the Texas Railroad Commission has stated they believe natural fractures in the Buda and Austin Chalk occur near fault lines.

    USEG has another lease in Dimmit County they are participating in with a different undisclosed operator. They are drilling three Buda test wells. No results have been released.
    Sep 9 07:50 AM | Likes Like |Link to Comment
  • Buda Oil Well Rates Of Return Better Than Eagle Ford [View article]
    According to the Texas Railroad Commission the Booth-Tortuga lease in the Buda sweet spot had a sequential growth rate of 34% from June to July. Very impressive. Contango (MCF) has a 50% working interest in the lease and U.S. Energy (USEG) has a 30% working interest in the lease.
    Sep 8 04:37 PM | Likes Like |Link to Comment
  • Buda Oil Well Rates Of Return Better Than Eagle Ford [View article]
    I didn't think U.S. Enercorp was the new operator USEG is drilling with in Dimmit. But you make a compelling case and may be right.
    Sep 3 10:08 AM | 1 Like Like |Link to Comment
  • Buda Oil Well Rates Of Return Better Than Eagle Ford [View article]
    The new locations look like infill wells between some of their most prolific wells.
    Aug 14 10:22 AM | 1 Like Like |Link to Comment
  • U.S. Energy's (USEG) CEO Keith Larsen on Q2 2014 Results - Earnings Call Transcript [View article]


    http://seekingalpha.co...
    Aug 13 03:07 PM | Likes Like |Link to Comment
  • EXCO Resources Could Be Sitting In The Buda Sweet Spot [View article]
    The latest update on the Buda:

    http://seekingalpha.co...
    Aug 13 12:10 PM | 1 Like Like |Link to Comment
  • Buda Oil Well Rates Of Return Better Than Eagle Ford [View article]
    USEG currently has 9,000 net acres prospective for the Buda and something like 35,000 gross acres. Not all are in the sweet spot. It is also too early to tell what the potential down spacing would be. At a minimum they have a couple of dozen of additional locations near the sweet spot.

    They recently acquired a 3,000 net acre position in an undisclosed location with an undisclosed private operator. The operator had drilled two wells and plans on fracture stimulating both wells in August. Those wells may be on the confidential list and it might be sometime before we get specifics. My understanding from investor relations was the original plan was to frack the wells if they didn't encounter a significant number of natural fractures. So we will have to wait and see on those 3,000 net acres. The only thing that is certain is there is a lot of oil all over the northern half of Dimmit county. The only challenge is what formation its located in and what is the best recipe to make an economical well. But the county is swimming in oil.
    Aug 13 12:06 PM | 2 Likes Like |Link to Comment
  • Chesapeake Joining Buda Oil Rush In South Texas [View article]
    USEG second quarter operations update is out:

    http://yhoo.it/1oXqhMp

    In the words of the CEO "Buda, Buda, Buda!"

    This is great news for XCO as they have thousands of potential net acres to and farm-in opportunities to the west of the Booth-Tortuga lease. The Zavala Syncline fault runs south of the Zavala Dimmit border all the way to the western side of both counties.
    Aug 11 11:44 AM | 1 Like Like |Link to Comment
  • Chesapeake Joining Buda Oil Rush In South Texas [View article]
    Actually, they have no idea and it is all new to them. They are trying to be ultra conservative with their estimates in order to under promise and over deliver.
    Jul 24 09:43 PM | Likes Like |Link to Comment
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