procactivinvestors July 25, 2016
The proposed transaction sees the company secure 100% of a project starting, where it would initially drill as many as six horizontal wells targeting the Niobrara shale.
It would pay a total of US$500,000 in cash (US$250,000 initially) and will give the seller royalties over future revenues. After royalties to both the seller and the State of Colorado the company will be left with 80% revenues from the project.
Drilling could start before the end of 2016, as HNR has revealed that talks are already underway with several industry partners for joint financing and development.
The project is bordered by acreage that’s already been developed by ConoccoPhilips, which has had nearby wells that have produced some 50,000 to 100,000 barrels of oil in aggregate over their first six months.
As such, these nearby ConoccoPhilips wells are among the top 12% of Niobrara shale wells, HNR highlighted. It added that Niobrara, producing some 371,000 bopd (according to July 2016 data), us ranked as the United States’ fourth largest tight oil play.