Just out this evening. If this is for real there could be some serious upside here.
EXCO Resources Could Be Sitting In The Buda Sweet Spot
Just a visit from a USEG shareholder. There is no "could be." If you read the article about Contango is sitting on a bonanza of buda oil you will see the discussion about the Zavala Syncline fault line that runs east to west and sits just south of the Zavala and Dimmit border. All of the acreage EXCO Resources has within a couple of miles north and south of the fault line contains a naturally fractured Buda play.
Contango has less than 6,000 net acres and they have several hundred million dollars worth of Buda oil reserves on that acreage. USEG has 3,500 net acres in the play and that also has 3-5 hundred million dollars worth of oil. Just look at how good the wells are turning out. The most information about all of this is on the USEG message board on Investor village.
a) Are you sure they own the rights to BUDA? They stated such in previous presentations and CCs but noticebly absent in the last Qs. I would not take it for granted that they actually own those rights.
b) Study the BUDA. It is quite fickly and can not be fraced (limestone, I believe?) One has to find natural fractures and sweet spots are more like sweet dots.
c) KKR gets to participate in farm outs and CHK gets to buy back in if I recall
d) Look at the map and see that there are not a huge amount of sections in the author's sweet spot
My point is ya better do some serious HW first. Having the article come out the day it hits a huge low, sub $5 is interesting to say the least
Yes they do, the deal summary is on the company website and it specifically mentions the Buda/Austin Chalk. You should do you research instead of telling others to be sure about the facts. The same presentation give all the information you raise questions about. They have farm in options on 147000 acres in addition to the 55000 so there is huge potention.