location

DJ Basin (CO/WY)

Field Overview

Discovered in the 70s. Has >30k producing wells spread over >2000 sq/m., and 7 formations, only two of which now support 8-12 laterals per section. Major operators control the field and have “cracked the code” for drilling. Yields and CapX continue to climb. In the last couple of years investment emphasis has been on the Permian in Texas, while the Wattenberg has quietly crept up to one of the best performing fields in America.  Today, it ranks among the Top 5 fields in terms of break-even lifting costs.

Thoughts

The field—the Wattenberg in particular—continue to show sustained growth and increased productivity due to CapX commitment, drill/completion learning, migration to lateral heavy programs, and section-by-section development strategy. 

Operators have figured the field out with enhanced completions pushing results higher. It is gas and oil rich, offering a good mix of both depending where you are in the field. And the infrastructure is extensive after 50 years of development.

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What we’re calling Project Mailbox, is a time tested strategy that marries a great de-risked basin and operator(s) producing highly productive wells with large government tax incentives available to oil/gas investments.

Ours takes this winning strategy and improves on it by cutting out the middleman (who simply buys the best positions from folks like us and then resells them at a much higher price to investors). Our deep field knowledge and relationships give us visibility into what’s going on, where, and oftentimes gives us a good understanding of when. Of course, sometimes schedules slide, or assets are deployed elsewhere. A risk among many.

However, what’s not at risk is getting oil out of this de-risked field. For example, the large operators in the field don’t really ever drill dry holes. In short, we call it a mining operation at this stage of the field development. It’s no longer a question of if, but rather how much oil/gas there is. From an investment perspective, it’s about knowing who the good operators are, where the sweet spots are and then the timing of when it is drilled.

We are happy to walk through the technical data and our rational. Once you see the data we’ve studied and collected from our years of experience here, we believe you’ll share our conclusions.