U.S. Energy Participates in 9 Well / $49 Million Development in the Powder River Basin
June 19, 2019 – Arlington, Texas – U.S. Energy Development Corporation, one of the largest sponsors of direct-ownership oil and gas investments, has announced participation in a 9 well oil development project in the Powder River Basin, also known as the PRB. The company committed $6.6 million to this project on behalf of one of its Acquisition Funds, the Strategic Energy Income Fund V LP. As of mid-June, production from the first four wells was averaging approximately 700 barrels per day, which is above type-curve for this stage of production (footnote 1). Revenue associated with these wells are anticipated to be received this summer (footnote 2).
U.S. Energy’s investment in the PRB is targeting wells in the Parkman & Turner formations located in the southern core of the PRB, an area which has historically been a main source of the Basin’s oil production. The wells range between 7,400 and 10,200 feet total vertical depth with 1-mile laterals. The Powder River Basin encompasses more than 43,000 square miles and is located primarily in northeast Wyoming and southeast Montana.
Oil well development in the PRB has risen lately, fueled by favorable oil prices and a growing backlog for new well development in other regions. As of May 17, 2019, the number of rigs operating in the PRB has risen more than four times since bottoming in the summer of 2016 (footnote 3). New well permits have also risen – one indicator of production in the region. Major companies that have recently done deals or announced big plans in the PRB include EOG Resources Inc., Anadarko Petroleum Corp., Devon Energy Corp., and Chesapeake Energy Corp. (footnote 4)
“The PRB is well defined and highly repeatable from a geologic and productivity standpoint,” commented Todd Witmer, U.S. Energy’s VP of Corporate Development. “Although total production in the region is notably lower than regions like the Permian and Eagle Ford in Texas, individual well level economics in the Powder River Basin rival that of other top-tier oil-producing regions in the U.S.” (footnote 4)
The Strategic Energy Income Fund V is U.S. Energy’s fifth in a series of direct investment acquisition funds (footnote 5). The company has announced several other acquisitions and divestitures in recent months, including a $77 million co-investment in the Permian Basin in May 2019, and the divestment of acreage to Devon Energy in October 2018.
A leader in oil & gas direct investments for clients with tax planning needs, U.S. Energy blends operational and financial innovation with a forward-looking approach. Since 1980, U.S. Energy has invested in, operated, and/or drilled more than 2,400 wells in 13 states and Canada; deploying more than $1.4 billion on behalf of our partners. Today U.S. Energy oversees daily production in excess of 7,500 barrels of oil equivalent (BOE) and holds numerous drilling records across south Texas.
Past performance is not an indication of future results. This information contained in this document is for informational purposes only. It does not constitute an offer to sell or a solicitation of an offer to buy any security. Such offers can only be made by a Private Placement Memorandum to accredited investors. Oil and gas investments involve a high degree of risk and are not suitable for all investors. You should purchase these securities only if you can afford a complete loss of your investment. Please refer to the Risk Factors section of any specific Private Placement Memorandum. The equipment pictured in this brochure is not owned by, and will not be owned by U.S. Energy Development Corporation or its partnership(s), unless otherwise noted. The assets pictured within this release accurately represent the assets U.S. Energy or its partnerships may own. Please refer to the Areas of Operation section of any specific Private Placement Memorandum.
footnote 1 – ‘type-curve’ represents a method for quantifying well and reservoir results by comparing the pressure change to reservoir model(s).
footnote 2 – Distributions are not guaranteed as the completion and/or operation of wells in the future is uncertain and may not come to pass.
footnote 3 – https://rigcount.bhge.com/rig-count-overview
footnote 4 – https://www.bloomberg.com/opinion/articles/2018-09-10/powder-river-basin-shale-oil-is-having-a-moment
footnote 5 – The offering referenced is for Accredited Investors only.
Securities sponsored by U.S. Energy Development Corporation are offered through Westmoreland Capital Corporation (CRD 11469), Member FINRA/SIPC – an affiliate of U.S. Energy Development Corporation.
U.S. Energy Announces Participation in a $77 Million Development of its ‘Echo’ Project in New Mexico
April 30, 2019 – Arlington, Texas – U.S. Energy Development Corporation has announced that the company is participating in a $77 million development of its Echo project acreage. The project will co-invest with three other companies and includes an interest in 8 oil wells for a net investment of $5.5 million. Current development is expected to create additional cash flow while potentially increasing the future divestment value on the more than 2,700 net acres owned in the Echo project.
U.S. Energy ‘Echo’ Project Returns 61% to Investors on Initial Asset Sale
December 12, 2018 – Arlington, Texas – U.S. Energy Development Corporation, an independent oil and gas operator specializing in direct participation programs, has sold a portion of its Echo project to Devon Energy (NYSE: DVN) for a 61.35% distribution net to its Strategic Energy Income Fund V LP; one of the company’s Acquisition Funds. The Echo Project was acquired by the Strategic Energy Income Fund V LP in early 2018 and proceeds were distributed in October 2018.