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  • Chesapeake Joining Buda Oil Rush In South Texas [View article]
    The Carol-Pick Buda oil well drilled by CML Exploration is on the northwest line of the Booth-Tortuga lease. The well has produced over 97,000 barrels of oil in less than 4 months and may prove to be the best Buda oil well drilled in the area before it is all said and done. The well cost only $3 million to drill and complete and would have reached payout already with $45 oil at the wellhead. It appears the really good Buda wells are all north of the Zavala Syncline fault.

    http://bit.ly/1DYd0ZC

    I am leaving a link to an Investor Village message board post of the well results because I believe it will create a longer lasting record on the worldwide web. Once CML Exploration reports the well results by its lease the link will be lost on the Texas Railroad Commission online website.
    Jan 14, 2015. 06:54 AM | Likes Like |Link to Comment
  • Chesapeake Joining Buda Oil Rush In South Texas [View article]
    No September update on Chesapeake's Buda well.

    On another note Contango (MCF) and U.S. Energy (USEG) are moving to develop their Eagle Ford acreage next Chesapeake in 2015 due to Chesapeake's success in the play. Contango estimates their whole Eagle/Ford Buda play's 50% working interest is worth $626 million when developed. USEG has a 30% working interest in the same lease. USEG is currently trading for only $70 million and had over 1,500 Boepd in production in the third quarter.
    Nov 11, 2014. 11:24 AM | Likes Like |Link to Comment
  • Chesapeake Joining Buda Oil Rush In South Texas [View article]
    Some comments on USEG I just posted on my blog:

    http://seekingalpha.co...

    On a different note we may get some September production numbers for Chesapeake's first Buda wells.
    Oct 28, 2014. 11:48 AM | 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, 2014. 10:20 AM | 2 Likes 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, 2014. 08:57 AM | 2 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, 2014. 09:42 AM | 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, 2014. 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, 2014. 09:43 PM | Likes Like |Link to Comment
  • Chesapeake Joining Buda Oil Rush In South Texas [View article]
    The article was about the success in the Buda and surveyed the different players. If it was about USEG it would have mentioned they have very little debt and are able to drill these Buda wells out of cash flow.
    Jul 23, 2014. 03:49 PM | 2 Likes Like |Link to Comment
  • Chesapeake Joining Buda Oil Rush In South Texas [View article]
    The drilling economics is the huge key to the Buda. By my rough calculations collectively as a group the Beeler 2H, 3H, 4H, 6H, 7H, 8H, 9H, and the Woods Unit B wells all achieved a 100% return of capital by the end of May based on the TRC production reports. All production from those wells going forward is pure profit. That is amazing considering four of the wells didn't even start producing until 2014.

    I'm not including the 5H well, because in my mind all the costs of drilling the 5H and the sidetrack need to be included and so far that has been the most expensive well. But regardless of the production from the 5H there should easily be enough production from the eight wells listed above to achieve a 100% return of the capital invested in the 5H well.
    Jul 23, 2014. 02:40 PM | Likes Like |Link to Comment
  • Chesapeake Joining Buda Oil Rush In South Texas [View article]
    We need more data on the 9H and 5H to know what kind of wells they are. Thanks to the contribution of someone who to the well sites it looks like the Beeler 8H and the Sage Energy Reinhard-Zientek wells have been fracture stimulated (the auto speller won't let me type f-racked). We also need data on those wells.

    The larger point is it is very hit and miss, but the winners pay for the mediocre wells. FYI, what we are calling mediocre wells are on a trajectory combined to reach payout in less than two years. The expectations are so high for the Buda play it is almost surreal.

    What is fascinating is the Beeler 4H well and the Jessica wells are clearly home run wells. But the 7H well located right near them is mediocre. A lot remains to be learned about the geology and best drilling techniques for the Buda.
    Jul 23, 2014. 10:08 AM | 4 Likes Like |Link to Comment
  • Chesapeake Joining Buda Oil Rush In South Texas [View article]
    To find the Jessica well click on the online permit on the TRC website:

    http://bit.ly/1p8786Z

    There is a map link next to the API# under surface location. Click on the link and find well #33098. The Beeler 4H is #33040 and the Beeler 7H is #33073. You may have to zoom out 1.5X to find the Beeler 4H.
    Jul 22, 2014. 06:14 PM | 1 Like Like |Link to Comment
  • Chesapeake's Eagle Ford News Good For Surrounding Companies [View article]
    USEG is probably the most undervalued oil and gas stock in the market. They are trading for less than 2X revenue with almost zero debt and are cashflow positive.

    They are selling some non-core real estate which will eliminate all of their debt by the end of Q3, assuming the deal closes.

    They receive only 5% of their revenue from the Eagle Ford acreage surrounded by Chesapeake.

    They are in the process of attempting to monetize a non-core mine that is an expense with zero revenue. The mine could be worth more than the stock is trading for.

    Finally, cash prices for their main Bakken production revenue source and acreage are more than double the market cap of the stock. Not prices compared to what other stocks are trading for, cash.
    Aug 9, 2012. 11:49 AM | Likes Like |Link to Comment
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