i go to a different place on valuations myselfi tend to think...

i go to a different place on valuations myself

i tend to think the probable and unproved in the efs will go for no more $25,000. i have my own calculations on how many acres there are at worse case..

i am of the belief that there is also a minimum number proven acreages that any sharp negotiator could haggle over, and those proven acreages go for a huge premium.. there is good story in the acres there to say the proven could be a lot bigger than that and then your talking even more staggering upside potential..

this is how i see it.. the current unproven and probable acreages only, adds up to about the current MC of texom as of right now, and there is nothing given for the staggering upside of proven acreages, which is where i am seeing value in the future for texon,

hence i aint sellin..


the more technicals you have, the more geological info, logs, core samples and then factor in producing wells near by, all add to case of gaining more proven acres..

factors like producing wells heal to toe. give you big step out claims i understand. sometimes multiple step outs.. so how many recent efs sales had multiple heal to toe efs producing wells on them throughout?

we have one well in the middle of 3 wells heal to toe on tyler ranch 1h. with the northern well owned by texon and the san miguel efs 1h belonging to swift on the other end

there is one efs well on its own, teal..

then a well spacing left out, then south of the acreages there is hoskins with a murphy well heal to toe on it. so two examples of heal to toe production in the confines of 7200 odd acreages. if your a buyer how are you going to justify giving no value to those factors in texons acres?

those sorts of factors, plus a cluster of 5 wells in between the acreages and 3 producing wells all around the southern acreages, that all adds up to pretty impressive acreages and a real good argument that the area is very much derisked. more so than for a sale of 50,000 or 100,000 efs acres with 4 or so single wells across a huge space on non-contiguous acreages - usually those deals are picked up cheap and a few wells plugged in throughout just to get a treble or quadruple of your original investment and turn it over to a larger oiler, or an international wanting to understand unconventional fraccing....

i tend to think the small region texon is focussed has huge upside when you factor 4 efs wells, multiple heal toe completions, and so many more close by producing efs wells around them. and all on a small sum of acres. texon can prove up some detailed technicals on what they have, which none of the deals thus far have been able to give entirely over their whole position.

my view is that the proven acreages are where the true upside value is

so when texon presents in the data room, its going to be real impressive.

can a buyer really talk these acreages down and claim them to be high risk?? and come up with a comparable deal to justify any such claim?? not sure how well you could do that..

is no one interested in the efs? finding that hard to believe.. if you listen to pappas from swift recently, he thinks its the greatest US oil discovery and he includes GOM!!

how many out there are in for a good piece of derisked oil producing efs??

heck, they can just go to the lesser fields in the east like fayette and get some real cheap acreages and risk drilling out under somewhere like the giddings field, or on some patchy sections out there.. and blow their capital they saved on a texon deal for a strategy of dud wells and then spend a bomb trying to figure it all out over 3 or 4 wells as to how to frac it and make it all back.. would you risk 3 or more wells on dud acres just to know you never will make it back unless you got 2 or 3 real stunners just to break even..??

so having the right address helps, and when the address is good and derisked like texons are in mcmullen, and the one thing texon has is consistent and spectacular well results, with only a few missed frac sections in one of the thee wells..

you may conclude then, if as an investor you think there is upside in texon as i do, that as a real possibility, the market is misunderstanding the quality texon acreages

i have seen operators pay a lot more per acre than what the market is giving texon currently for their acres in the efs. and really get poor well performance.

derisking a section of efs acreages like texon has must have considerable value

my view is that there is a strong case for a good price in texons acreages.

all imho and dyor