McCulloch County, TX Oil & Gas Producing Wells

This listing presents an opportunity to acquire working interest in an oil and gas production, exploration, and development project located on a 219-acre lease in McCulloch County, Texas. The project currently features 16 producing oil wells, generating immediate income. These wells produce 38 gravity WTI oil from the Morris Channel Sand formation, also known as Strawn. All necessary infrastructure, including flow lines, tank batteries, separators, and three injection wells, is in place. A total of 20 wells have been drilled on the property since 2014, with one well (#12A) being non-commercial and plugged. Oil is currently sold to Sun Oil Co. (Sunoco), with Energy Transfer Crude Oil trucking handling transportation.

Future development plans include drilling four additional direct offset PUD locations between September 30th and December 31st, 2024, with potential for 15-20 more drilling locations identified across the lease for development over the coming years. Estimated average oil reserves per well range from 20,000 to 25,000 barrels, with total estimated cumulative reserves on the 219-acre lease projected between 450,000 and 850,000 BOIP once fully developed.

Financial projections indicate a strong potential return on investment (ROI) of 30% to 50% in the first year, considering the current producing wells and the four new drills. Each well is estimated to have a life of up to 30 years, with a slow decline after the third year. Over the entire project life, the ROI could reach 10:1 or more, assuming an average oil price of $75 per barrel. The drilling and completion of each new well is estimated to take approximately five months, with daily production from the four new wells potentially reaching 40 to 100 BOPD. If no further drilling occurs, the current 16 wells are projected to yield an annual ROI of 8% to 12% at $75/bbl. Drilling a new well to total depth takes about 1.5 days, with equipping and production startup taking approximately three weeks. The operational strategy involves continuous drilling and completion, ensuring immediate revenue from producing wells while new ones are brought online.