For sale is a 38.000% working interest and 28.120% revenue interest in all rights to the base of the Austin Chalk formation in the 266-acre Lester Unit in Gonzales County, Texas, which contains two vertical wells, of which the Lester Unit #2 well was drilled and temporarily plugged in late 2019 while partners decided what to do with the well.
With oil prices surging the current operator, Baron Energy, is planning to drill out the plugs, case the well, and frac the Austin Chalk zone in the Lester Unit #2 well in August. You can buy in to the 38% interest at cost for $357.5K, then invest $142.5K to pay for drill out, completion and facilities. The balance of 62% working interest is ready to proceed with the operation.
Baron Energy is run by an individual who spent 19 years as engineer and executive for Conoco Inc., 21 years as independent owner/operator/officer, is a Licensed professional engineer in Texas, and has an engineering degree from The University of Texas at Austin.
Project economics have been run using 82,500 BO recoverable reserves over 10 years. The economics show projected return of $1,215,000 for the $500,000 million investment to the 38% working interest (a 2.4x ROI), a 12-month payout, and 84% IRR.
This offer is subject to prior sale or withdrawal.
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