Article referencing the DTE and Atlas Energy regarding the Marble Falls acquisition. Additionally, three of the counties that they will be focusing the drilling in, are counties which Petrichor owns property in as well (Jack, Palo Pinto and Clay).

1. December 5, 2012 • Volume 23, No. 16
Transactions
Serving the marketplace with news, analysis and business opportunities
Freeport shocks with $20 billion McMoRan & Plains buy Resolute triples Permian
Global miner Freeport-McMoRan Copper & Gold raised investor eyebrows production for $120 million
by jumping back into the US upstream oil and gas sector, announcing its reunion with Resolute Energy is adding 1,418
1994 spin-off McMoRan Exploration and also picking up Plains E&P in a pair of boepd of Permian Basin production in
acquisitions totaling $19.6 billion in cash, equity and debt. To secure the deals, Freeport a $120 million deal The producing and
paid shareholders a stock price premium of 74% for McMoRan and 39% for undeveloped properties are primarily
Plains in cash and equity. The located in Howard Co., Texas (about
The international mining firm takes out
deals came as a surprise as six miles away
2 respected public E&Ps in one fell swoop.
McMoRan has been plagued by operational from an existing
delays at its landmark Davy Jones discovery and Plains just closed November 30 on a $6.1 Resolute property with significant
billion purchase of deepwater Gulf of Mexico assets from BP and Shell—fundamentally production) and Lea Co., New Mexico
shifting the E&P firm’s portfolio from primarily onshore to about two-thirds offshore. and hold proved reserves of 4.1
The two takeovers give Freeport a large oil and gas asset base focused on the MMboe (73% oil).
deepwater Gulf of Mexico and deep shelf gas prospects. In total, Freeport is getting
reserves of 575 MMboe 1P (64% liquids) and 1,581 MMboe 3P (45% liquids) with an Assets have 4.1 MMboe 1P (37% PUD) vs.
Resolute’s pre-buy 3.5 MMboe (66% PUD).
additional 6.3 Bboe of near-term resource potential. Continues On Pg 18
Atlas buys highly attractive Marble Falls for $255 million The deal greatly increases both
Atlas Resource Partners announced its fifth and largest acquisition since the Resolute’s Permian production and
shale-focused MLP was spun off from Atlas Energy in March—picking up gas reserves from 600 boepd (in Q3) and
and electric utility DTE Energy’s remaining upstream assets for $255 million. 3.5 MMboe. The acquired reserves are
The assets in the Fort Worth Basin primarily target the shallow, liquids- located 44% in Howard Co. and 36% in
rich Marble Falls limestone Lea Co.’s Denton field with other fields
Pays DTE $500/acre plus $6.30 accounting for the remaining 20%.
on acreage offsetting Atlas’ QPi ppboe/g or $58,000 ppboe/d.
existing Barnett shale position. Continues On Pg 5
Located in Jack, Erath, Palo Pinto and Clay Cos., Texas, the DTE properties
are estimated by Atlas to hold proved reserves of 35 MMboe (24% oil, 33% NGLs, FEATURED DEALS
43% gas) which will increase the company’s total by 30% to 150 MMboe while also
boosting liquids to 26% of total reserves from 17%. DTE placed the assets’ proved SOUTH TEXAS PROJECT
2-Horizontal PDP’s. 14,200-Net Acres.
reserves at 46.5 MMboe (16% oil, 36% NGLs, 48% gas) at the end of Q2. With 261
LAVACA COUNTY
wells currently producing 3,800 boepd (and an average 4,000 boepd expected in CONNIFF & GRAHMANN UNITS PP
2013), the 88,000-net-acre acquisition is 80% undeveloped, 100% operated and held Eagleville (Eagle Ford). ~14,000 Ft.
with an average 99% WI. Continues On Pg 16 Austin Chalk, Edwards & Buda.
SIGNIFICANT UPSIDE POTENTIAL
100% OPERATED WI; 75% NRI 136
Vanguard picks up Montana production for $131 million Gross Prod: 23 BOPD & 678 MCFD BOED
Vanguard Natural Resources agreed to acquire mature non-op assets within Net Prod: 17 BOPD & 509 MCFD
Montana's Bakken trend for $131 million from an undisclosed company. Vanguard said PLS IS BUILDING DATA ROOM
current net production of 1,100 boepd will be immediately accretive to cash flow when the PP 1932DV
deal closes in December. However, the properties are subject to third-party preferential
PERMIAN SALE PACKAGE
rights that could reduce the ultimate size of the deal. Those preferential rights 27-PDP Wells. ~1,930 Net Acres.
expire December 9. MIDLAND, ECTOR & ANDREWS CO.
With the Montana purchase, 2H12 acquisitions total ~$900 million,
with other buys in Mid-Con & Rockies.
SPRABERRY (TREND AREA) PP
Vanguard has now spent ~$900 million Multipay: Wolfberry; Strawn, Wolfcamp
---Dean, Spraberry & Clearfork
this year acquiring assets—all of which occurred during H2. First it paid Antero 50-100% OPERATED WI; ~38-75% NRI
Resources $434.4 million in June for Woodford and Fayetteville assets holding proved Gross Prod: 573 BOPD & 1,284 MCFD 393
reserves of ~420 Bcfe (82% gas, 58% developed) and producing ~76 MMcfed (91% Net Prod: 320 BOPD & 741 MCFD BOED
gas) on 71,300 net acres. Net Cash Flow: >$1,000,000/Mn
Then in early November Vanguard announced a $335 million purchase of Piceance Substantial Drilling Upside
Offers Due By December 10, 2012
Basin assets in Colorado and Wind River Basin assets in Wyoming from Bill Barrett— CALL PLS FOR MORE INFO
with production of ~65 MMcfed (86% gas) and proved reserves of ~300 Bcfe (78% PP 1695DV
gas, 80% developed) on 208,100 net acres. Continues On Pg 17
All Standard Disclaimers & Seller Rights Apply.

2. Transactions 2 December 5, 2012
A&D News TPG-Axon ratchets up the
Abraxas kicks off divestiture program in Texas & Montana heat on SandRidge
Abraxas Petroleum announced it has entered a preliminary agreement to sell Hedge fund TPG-Axon Management
its 25% WI in the Nordheim project targeting the Eagle Ford for $19.1 million to an sent a second letter on November 30
unnamed “large institutional buyer.” The assets being divested consist of 544 net to SandRidge. “An outright sale of
acres in DeWitt Co., Texas with net production of ~380 Mcfed (56% gas, 26% NGLs, the company is the most realistic path
26% oil). Abraxas will retain its rights to production, reserves and to restoring the
upside in the overlying Edwards limestone across both its Nordheim shareholder value that
and Wagner lease blocks. Petrie Partners is acting as Abraxas’ advisor in the sale has been destroyed,” fund manager Dinakar
expected to close December 17. The asset was part of Abraxas’ Blue Eagle JV with Singh wrote. A second option includes
Rock Oil until the two companies agreed in August to dissolve the partnership. dramatic simplification and restructuring of
In another non-core divestiture, the company. TPG-Axon has increased its
Got $20 million in sale of Eagle Ford stake in SandRidge from 6.2% to 6.5%.
Abraxas agreed to sell its ~10,000-net-acre acreage, $3 million for Montana land.
Alberta Basin leasehold in Montana and The new letter notifies SandRidge of
lease its mineral acreage in the area for combined proceeds of $2.85 million and 1.25- TPG-Axon's intent to take the fight directly
5.00% ORRI. Closing was scheduled for late November on the Alberta Basin properties to shareholders and conduct a shareholder
which do not have any associated production or reserves. Abraxas will use the proceeds consent solicitation to amend the bylaws to
to reduce the $134 million in debt owed under its $150 million credit facility. allow for a de-staggered board and remove
“The Alberta Basin and potential Nordheim asset sales are the start of what we directors with or without cause, and to
hope to be an active and profitable campaign of divesting non-core assets,” said allow for removal and replacement of the
Abraxas chief Bob Watson. “We remain committed to enhancing shareholder return entire board of directors. TPG-Axon has
by de-levering the balance sheet and refocusing the portfolio on our highest returning retained MacKenzie Partners Inc. to
and highest growth basins.” handle the shareholder solicitation.
The November 30 letter follows
Investor group pushes for further asset sales— a November 8 initial letter expressing
Unsatisfied with company efforts, Abraxas investor Clinton Group (which believes discontent with SandRidge's performance
itself to be one of the top 10 stockholders) wrote a letter to the company’s board urging and management. On November
it to rapidly sell non-operated and undeveloped acreage which it believes could bring an 15, investor Mount Kellett Capital
additional $160 million. Clinton Group blamed Abraxas’ “unfocused” approach for stock’s Management (owner of 4.5% of
32% slide over the past six months during which peers have seen they’re stock rise ~30%. SandRidge) also sent a letter expressing
“In our view, the Company is too concern over management and value.
Clinton Group has launched shareholder
small to effectively support such a highly Following TPG-Axon’s initial letter,
campaigns against 9 firms in 5 years.
diversified such a highly diversified SandRidge adopted a poison pill.
model, and management must take steps to consolidate operations and exploit economies
of scale by focusing on development activities in a small number of key basins,” the
investment group wrote, specifying Abraxas’ high-working interest, operated holdings
ABOUT PLS
in the Bakken, Eagle Ford and Permian.
The PLS A&D Transactions covers news
Clinton Group also complained about Abraxas’ lack of transparency with regard the active asset marketplace with mergers,
to production guidance and drilling results—a claim the E&P firm apparently took divestitures, transaction, analyst comments,
to heart. Four days later Abraxas announced Q4 guidance of 4,300-4,500 boepd and deals in play and deal metrics.
2013 guidance of 4,900-5,200 boepd (up 21-28% YOY). The Q4 guidance reflects the To obtain additional PLS product details,
Nordheim divestment as well as recent and expected Eagle Ford and Bakken well results. drill www.plsx.com/publications.
PLS Inc.
Suggested Further Abraxas Divestitures & Est. Values One Riverway, Ste 2200
Houston, Texas 77056
Est. Net Est. Total 713-650-1212 (Main)
Region Formation Acres Est. $/Acre ($MM) 713-658-1922 (Facsimile)
Powder River Basin Niobrara 17,800 $2,500 $44.50
To obtain additional listing info, contact us
Western Alberta Pekisko 6,880 $2,500 $17.20 at 713-650-1212 or listingmgr@plsx.com
Permian (Reeves) Strawn/Frio/Yates 2,900 $5,500 $15.95 with the listing code. To become a client call
713-650-1212.
Permian (Other) Strawn/Frio/Yates 32,631 $2,500 $81.58
© Copyright 2012 by PLS, Inc.
Total 60,211 $159.23
Any means of unauthorized reproduction is
Source: Clinton Group Press Release prohibited by federal law and imposes fines
up to $100,000 for violations.
Find more on the A&D arena at www.plsx.com

3. Volume 23, No. 16 3 A&D
A&D News QRE expects robust MLP deal pace to continue next year
US shale gas holds appeal QR Energy CFO Cedric Burgher believes the entire upstream MLP industry is
“at capacity” with the strong pace of deal activity likely to continue well into 2013.
for Qatar Petroleum
Burgher told Baird at a non-deal road show in Milwaukee that QRE continues to seek
Qatar Petroleum is seriously
non-auctioned deals with reliance upon its reputation for reliable closing and fair
considering investing in US
dealing among potential private sellers.
unconventional gas, the state-owned
Burgher further stressed QRE’s efforts to bring increased transparency to the
firm’s international chief said at an energy
firm’s G&A structure which Baird called a recent source of investor unease. Baird
conference in London. Nasser
said it expects material growth for the company next year.
al-Jaidah called the US shale gas
boom “an opportunity for us” and
said the company would be interested Sundance enters Eagle Ford via $105 million Texon merger
in partnering with major operators Australia-listed US unconventional player Sundance Energy agreed to acquire
with whom it already has partnerships Eagle Ford producer Texon Petroleum—also based in Australia—in an all-stock deal
back home—naming ExxonMobil and valued at $104.7 million. The deal adds Eagle Ford exposure to Sundance’s existing
Shell specifically. portfolio covering the Williston Basin, DJ Basin, Mississippi Lime
and Woodford.
May seek JV with IOC that participates The acquired assets QPi $60,000 ppboe/d plus ppboe/g or
Sundance pays $18
$9,900/acre.
in projects back home, like Exxon or Shell. cover ~7,500 net acres (~79% WI) in
Al-Jaidah said the US shale gas McMullen Co., Texas with estimated reserves of 1.7 MMboe 1P (NPV10 of ~$25
boom will allow top global LNG exporter million), 5.2 MMboe 2P (NPV10 of ~$103 million) and 11.3 MMboe 3P (NPV10
Qatar to redirect more supply to lucrative of $280 million) as of August 1. Five wells were producing 511 boepd at the end of
Asian markets. Investing in US gas Q3 with two more being drilled and potential for more than 100 additional wells. All
would also secure control of additional leases are covered by 3D seismic.
Texon’s non-Eagle Ford assets will be
resources at a time when Australia is “The combined company will have
spun off into new Cliff Foss-led firm Talon.
projected to overtake Qatar as the No. 1 production, cash flow and reserve growth
LNG supplier by 2017. potential with highly attractive risk-adjusted return potential,” said Sundance managing
director Eric McCrady. “Importantly, the combined company will have the funding
Qatar Petroleum & Exxon won DOE capacity to unlock significant value for shareholders.”
approval to ship LNG from Gulf Coast. Sundance will issue Texon shareholders two common shares per Texon share. Based
In early October Qatar Petroleum on the closing prices of both companies the day before the announcement (A$0.82 for
(70% WI) and Exxon (30% WI) won Sundance and A$0.36 for Texon), the deal represents a ~14% premium for Texon. Upon
federal approval to export LNG to closing expected in 1Q13, Texon shareholders will own a ~31% stake in Sundance. They
countries holding free-trade agreements will also retain Texon’s non-Eagle Ford exploration assets in South and East Texas via a
with the US from a $10 billion export new entity called Talon Petroleum to be led by current Texon chief Clifford S. Foss Jr.
plant to be built adjacent to the companies’
Golden Pass LNG import terminal on the Post-Merger Sundance Asset Porfolio
Texas Gulf Coast. If constructed, the
project could be Qatar’s first venture for
selling LNG produced in another country.
Selling made
simple!
PLS has marketed over $4.0 billion
in assets since 1988.
Hire PLS to execute your next
negotiated sale, call 713-650-1212
For general inquiries, e-mail info@plsx.com Source: Sundance November 13 Presentation via PLS docFinder www.plsx.com/finder

4. Transactions 4 December 5, 2012
A&D News A&D Briefs
Magnum becomes US Bakken operator in $30 million deal • Alberta Bakken explorer Big Sky
Samson Resources agreed to sell interests in Williston Basin wells and lease Petroleum entered the Permian with the
acreage—much of which include operatorship—in Divide Co., North Dakota to acquisition of an operated 90% WI (75%
Magnum Hunter for $30 million cash. Magnum already owned an average 47% NRI) in a ~2,300-acre initial lease block
WI in the properties and will now targeting the Wolfberry play in
Deal brings Magnum’s total Williston the southern Midland Basin. The
hold varied working interests up
leasehold to ~180,000 net acres. seller and purchase price were
to 100%. The deal also bring
not disclosed. Big Sky estimates the
Magnum sub Williston Hunter its first Bakken-Three Forks operatorship on the
acreage in Schleicher Co., Texas to hold
North Dakota side of the border, though the company already operates Tableland field
57 drilling locations at 40-acre spacing
on the Saskatchewan side with stakes ranging 70-100%. The Divide Co. properties with D&C costs of $2.0-2.2 million and well
produce 192 boepd and hold PDP reserves of 310,000 boe on 20,000 net acres— EURs of 120,000 boe. An initial vertical
which brings Magnum’s total Williston test well is planned for 1Q13.
QPi acre plus $70,000 ppboe/d.$828/ leasehold to ~180,000 net acres.
Magnum Hunter paying
• Toronto-based miner Canuc
Williston Hunter president Glenn Resources acquired 15% WI (12% NRI) in a
Dawson called the North Dakota operatorship brought by this deal a “primary goal” 14,574-acre lease in north-central Texas for
of the company and said initial drilling operations in the area will commence in an undisclosed price. Extensively drilled
1Q13 using the same methods as are for shallow oil, the Walker Buckler Ranch
Sale seems to mark full divestiture of
being applied at Tableland. lease in Shackleford Co. was recently
Samson’s North Dakota asset package.
For Samson, the deal appears to tested with a 4,552-ft well that intersected
represent the complete divestiture of a 140,000-net-acre Bakken-Three Forks the Caddo and Marble Falls formations
package the company was marketing earlier this year. Continental Resources on and came online at 250 Mcfd—half of
November 7 announced the acquisition of 120,000 net acres in Divide and Williams estimated capacity. A second well was
Cos. from $650 million; the remaining acreage in the package is equivalent to what scheduled to spud by November 30 in a
Magnum is buying. Magnum expects to close the deal around December 20. more oil-prone area. Based on 40-acre
spacing, many additional wells can be
drilled on the property.
• Eastern American Natural Gas
Trust terminated its agreement to sell
RISK?
royalty net profit interests in 257 West
Virginia gas wells to Softvest LP after
trust sponsor and well operator Energy
Corporation of America exercised
its right of first refusal. Based on the
November 2 closing price for Nymex
In a year of potential uncertainty from crude, ECA will pay ~$5.9 million for
• Global economic instability and weak demand
• Fiscal Cliff the interests, which generate average
• Dodd Frank legislation six-month net cash flow of ~$202,000.
• Libyan production coming back online Eastern American will retain its royalty
• Iranian nuclear build up net profit interests in ~340 Pennsylvania
• Israeli/Iranian crisis gas wells. The sale is expected to
• Uncertainty surrounding taxation and energy regulation close in January.
• Potential changes in crude oil transportation and distribution • First Titan Corp. announced
it is investigation its first production
acquisition wells since the company’s
IPO in September 2011. First Titan has
We Can Help. thus far concentrated its upstream efforts
Now is the time to mitigate volatility and protect your company from falling market prices. on exploration prospects with partners
Give us a call to discuss the best hedging strategy for your business in 2013. including Occidental, Anadarko,
Energen and Apache on the Gulf Coast,
Coquest Structured Products (214) 219-7555 in Oklahoma and in the Permian. It is now
evaluating the purchase of a stake in a
well producing 4.2 MMcfed (29% oil) near
Norman Young (281) 326-6666 I John Vassallo I Justin Joyce I Laura Hunter
some of the company’s other projects.
Find more on the A&D arena at www.plsx.com To learn more about PLS, call 713-650-1212

5. Volume 23, No. 16 5 A&D
A&D Briefs Argent Trust adds oily East Texas assets for $120 million
• Houston-based Halcón Resources Argent Energy Trust agreed to buy primarily oil producing fields in East Texas
acquired an undisclosed amount of from Wapiti Energy for $120 million. The assets cover 14,990 net acres (97%
leased acreage near Lordstown, Ohio operated) at Newton, Livingston and Double AA Wells North fields with estimated
from an unidentified operator gross 2P reserves of 8.7 MMboe (77% oil) as of March 31 and September net production
that, according to a company of ~1,705 boepd (69% oil, 9% NGLs) linked to LLS. Argent expects to maintain that
statement, “did not have the production level into 2013 with minimal investment.
desire or ability to develop the deeper The deal adds a significant liquids component to Argent’s overall asset base and
formations.” Halcón said it intends to increases the company’s total production by more than 40%. The acquired assets are
“spend hundreds of millions of dollars” expected to generate long-term sustainable cash flow to supplement Argent’s Austin
drilling horizontal Utica wells after Chalk and Eagle Ford development program. The buyer estimates the deal to be ~21%
modifying current leases. accretive to 2013 cash flow and production per unit and ~5% accretive to reserves per
• Maverick Drilling & Exploration unit, with a reserve life of ~13 years.
acquired 100% WI in leases covering 211
acres in and flanking the Gillock oil field
20 miles south of Houston in Galveston
Resolute triples Permian production Continued From Pg 1
Co., Texas for an undisclosed price. PLS believes the seller to be private Fort Worth-based Celero Energy II LLP
The seller was also undisclosed. Initial which operates the producing wells being bought in Denton field according to maps
reserve estimates provided by Resolute.
are expected next In Howard Co., Resolute is getting 1,310 non-op net acres (39% WI) producing
year following a pilot drilling program 377 boepd net in Q3 (~64% oil) from 23 wells. Upside exists from ~64 vertical
targeting the Frio sands. The Gillock Wolfberry locations and 66 recompletion opportunities. In New Mexico, the chief
acquisition is Maverick’s fourth project asset Resolute will acquire is the operated 1950s-vintage
area following the nearby Blue Ridge, Denton field, a conventional fractured carbonate reservoir
Nash and Boling salt domes which covering 2,767 net acres (96% WI, 100% HBP). Q3 net production from 39 wells
it is jointly developing with Gulf was 833 boepd (~89% oil). The upside here comes mainly from deepening existing
South Holdings. wells and infill drilling from 40-acre to
• Globalgroup Investment 20-acre spacing. Finally, Resolute will Howard Co., Texas bolt-on offers multi-
pay horizontal Wolfcamp & Cline upside.
Holdings sub Sovereign Oil Inc. agreed acquire a combination of conventional
to acquire a 120-acre lease in southeast and unconventional producing Permian properties covering 2,455 net acres (73%
Kansas holding nine producing oil wells WI, 100% HBP) with Q3 net production of 208 boepd. Resolute will finance the deal
and five wells scheduled for with debt and expects to close by December 21 with an effective date of August 1.
secondary recovery work from “We plan to realize the growth potential from these new assets, which [are] largely
Ad Astra Oil. Sovereign will self-funded, with a drilling program over the next four to five years,” said Resolute
assume ownership in the producing chief Nicholas J. Sutton. “The Permian Basin is an area we have long targeted as
wells in Miami Co. upon closing an important growth engine for the company, and this most recent expansion further
scheduled for December 15 and then strengthens our visible growth potential in this multi-pay, multi-play oil-prone region.”
begin rework on the five additional
wells at an estimated cost of $10,000/
well for an added annual revenue Resolute's PDP-Weighted Permian Oil Acquisition
stream of ~$250,000. • 3Q12 average production: 1,418 net Boe/d VES
ES
ES
COCHRAN
COCHRAN
COCHRAN
COCHRAN
COCHRAN HOCKLEY
HOCKLEY
HOCKLEY
HOCKLEY
HOCKLEY
HOCKLEY LUBBOCK
LUBBOCK
LUBBOCK
LUBBOCK
LUBBOCK CROSBY
CROSBY
CROSBY
CROSBY
CROSBY
CROSBY DICKENS
DICKENS
DICKENS
DICKENS
DICKENS
DICKENS
• Bakken producer Stratex Oil &
ES
ES
VES
• Estimated proved reserves of 4.1 million Boe Gladiola
Gas Holdings acquired non-op interests Northwest
• 73% oil, 63% proved developed & 63% operated Shelf Denton
YOAKUM
YOAKUM
YOAKUM
YOAKUM
YOAKUM TERRY
TERRY
TERRY
TERRY LYNN
LYNN
LYNN
LYNN GARZA
GARZA
GARZA
GARZA
GARZA
GARZA KENT
KENT
KENT
KENT
KENT
KENT
in six producing wells (ranging 0.14- Block A-0007 Eastern
• 9,654 gross (6,532 net) acres across several fields Knowles Shelf
5.00% WI), three wells being drilled
Dupree
LEA
LEA
LEA
San Simon LEA
LEA
LEA
Seminole GAINES DAWSON
DAWSON
DAWSON
DAWSON
DAWSON BORDEN
BORDEN
BORDEN
BORDEN
BORDEN
BORDEN SCURRY
SCURRY
SCURRY
SCURRY
SCURRY
SCURRY
and several permitted well locations • 90% HBP Channel W & NW Jo-Mill
DY
DY
DY
DY
DY
DY
Midland Luther SE
in Stark, Williams and Sheridan Cos., • Conventional & unconventional assets with ANDREWS
ANDREWS
ANDREWS
Basin
MARTIN
MARTIN
MARTIN HOWARD
HOWARD
HOWARD
Enterprise
MITCHELL
MITCHELL
MITCHELL
identified upside development projects
ANDREWS
ANDREWS MARTIN
MARTIN
MARTIN HOWARD
HOWARD
HOWARD MITCHELL
MITCHELL
MITCHELL
North Dakota. Stratex is paying the Central
Basin
Howard Co
undisclosed seller $250,000 cash plus • Howard–Wolfberry play (non-op) – Platform
44% of reserves
LOVING
LOVING
LOVING STERLING
STERLING
STERLING
LOVING
LOVING
LOVING ECTOR
ECTOR
ECTOR
ECTOR
ECTOR
ECTOR MIDLAND
MIDLAND
MIDLAND
MIDLAND
MIDLAND GLASSCOCK STERLING
GLASSCOCK STERLING
GLASSCOCK STERLING
GLASSCOCK
GLASSCOCK
GLASSCOCK C
C
250,000 common shares for a total
WINKLER
WINKLER
WINKLER
WINKLER
WINKLER
WINKLER
value of $600,000 based on the prior- • Denton–conventional field in N
N
N
N
N
N
Vermejo E
WARD
WARD
WARD
WARD
WARD
WARD
War-Wink
Lea County, NM with secondary recovery
CRANE
CRANE
CRANE
CRANE
CRANE
day close of $1.40/share. Operators upside –36% of reserves REEVES
REEVES
REEVES
UPTON
UPTON
UPTON
UPTON
UPTON REAGAN
REAGAN
REAGAN
REAGAN
REAGAN
REAGAN
IRION
IRION
IRION
IRION
IRION
IRION
T
T
T
T
on the 3,850 acres (on which Stratex
REEVES
REEVES
REEVES
Delaware
• Other fields –20% of reserves
acquired 2.3% WI) are Whiting, XTO Basin
Ozona SCHL
SCHL
SCH
SCH
SCHL
SCHL
and Continental.
PECOS
PECOS
PECOS
PECOS
PECOS
PECOS
Acquired properties Arch
EFF DAVIS
EFF DAVIS
EFF DAVIS
EFF DAVIS
EFF DAVIS
EFF DAVIS CROCKETT
CROCKETT
(red outline denotes key fields) Sheffield CROCKETT
CROCKETT
CROCKETT
Channel SU
SU
SU
SU
SU
SU
For general inquiries, e-mail info@plsx.com Source: Resolute December 3 Presentation via PLS docFinder www.plsx.com/finder

6. Transactions 6 December 5, 2012
A&D News What's On the Market Briefs
Shoreline buys Wattenberg royalty stakes for $12.5 million • Australian-listed Incremental Oil
Alberta-focused Shoreline Energy stepped across the border to acquire non-op & Gas has enlisted Envoi’s assistance in
Wattenberg field royalty interests in Colorado’s DJ Basin for $12.5 million from finding a partner to drill its Raven Pass
an undisclosed private US-based company. The interests range up to 1.45% and exploration prospect (100% WI) in Kern
are located on more than 150 land tracks totaling over 22,000 acres Co., California. IOG is offering a majority
interest—complete with operatorship
predominantly in Weld County. The primary targets are the Niobrara
if desired—in exchange for an equity
and Codell formations which
Expects assets to deliver $4.6 million contribution to past costs and a one-well
are already penetrated by more than 20
cash flow in first year—over 30% IRR. commitment (~$1.3 million gross) to test
horizontal wells on the royalty acreage
the shallow Cretaceous and penetrate
with nearly 60 additional locations permitted and scheduled for drilling during the deeper Cretaceous reservoir. Learn
1H13. Shoreline estimates the assets to hold an additional 400-700 drilling locations. more from PLS Listing No. DV 1828 or
Besides the horizontal potential, the deal brings royalty revenue from 300 low-rate contact the broker.
producing vertical oil wells. • Mantle Resources has engaged
Shoreline projects average cash flow of $375,000/month from the properties next EnergyNet to sell a package of 29
year with a 2013 exit of $750,000/month—providing what CEO Trevor Folk called operated wells located in three Texas
“the highest return of any project we have evaluated whether in Canada or the US.” counties and in Allen Parish, Louisiana. Net
The deal closed November 20. proved reserves are ~337,000 boe (77%
oil) with estimated PV-10 of $9.56 million.
Kabe Exploration enters Mississippian with 1,500-acre buy Gross oil production from six wells was 101
San Diego-based Kabe Exploration agreed to buy at least 1,500 acres in Cowley
bopd for the last six months and average
Co., Kansas from an unnamed seller, marking the new company’s first step in a
12-month cash flow was $173,882/month.
proposed development of up to 50 horizontal Mississippi Lime wells. The company
Refugio Co. upside includes 12 proved and
said it plans to expand its position in the 17 probable and possible behind-pipe
Newly launched E&P firm plans to
play by as much as 15,000 acres. zones and one PUD location. Request
expand its position by 15,000 acres.
“Kabe’s field acquisitions were PLS Listing No. PP1801DV or contact the
selected due to the tremendous potential of developing substantial oil and natural gas broker for more information.
reserves in a regional area which rivals any of the US oil shale plays,” said Kabe chief • Texas Tech Foundation retained
Erik Ulsteen. “Results of Mississippian Lime horizontally drilled wells demonstrate EnergyNet to sell its 2.5% ORRI in the
the potential for 300,000-400,000 boe per well at relatively shallow drilling depths of SandRidge-operated South Fuhrman
~4,000 ft, with high oil quality of 35-38°API gravity.” Kabe’s acquired acreage is east Mascho unit located in sections 5, 8, 9
of the generally accepted “sweet spot” of the play. and 15-17 of University School Lands
Survey Block 10. Gross production is
Lime Rock drops $21 million in Oklahoma reserves to MLP 758 boepd (85% oil). For more, check
Upstream MLP LRR Energy is acquiring its second drop-down from sponsor out PLS Listing No. RR 1856PP or get in
Lime Rock Resources, this time getting mature oil-weighted producing assets in touch with the agent.
Oklahoma for $21 million. In June the companies closed a $67 million transfer of • Wildhorse Resources hired
conventional Permian properties in Texas and New Mexico—also oil-weighted. EnergyNet to divest some of its interests
The Oklahoma properties have estimated net proved reserves of 1.99 MMboe in operated properties at Lisbon field in
(55% oil and NGLs, 53% PDP) as of October 1, with current production of 350 boepd Claiborne Parish, Louisiana. Wildhorse
from 124 wells (32 operated) for an implied reserve life of 15.6 years. is selling stakes of ~32-100% WI in
Annual maintenance capex of nine wells including five producing
$1.0 million is anticipated to QPi ppboe/g or $60,000sponsor $11
LRR Energy pays
ppboe/d.
with 12-month average net income of
$82,028/month. Request PLS Listing
hold production of 270 boepd flat through
No. PP 1859 for details.
2015. According to LRR Energy co-CEO Eric Mullins, the acquisition in Dewey and
Custer Cos. have a large inventory of low-risk development opportunities.
“This transaction fits our operational strategy of acquiring long life properties and
is a bolt-on to one of our core areas where we have extensive operating expertise and
Increase deal
scale,” said co-chief Charlie Adcock. flow & business
The purchase price is subject to adjustment based in part on the value at closing opportunities.
(expected around January 3) of hedge contracts included in the deal, which are
currently valued at ~$1.7 million. Tudor, Pickering Holt & Co. and Bracewell & Subscribe to PLS! For available options,
Giuliani LLP advised LRR Energy on the deal, which the MLP plans to finance with e-mail memberservices@plsx.com
borrowings under its existing revolving credit facility.
Find more on the A&D arena at www.plsx.com To learn more about PLS, call 713-650-1212

7. Volume 23, No. 16 7 A&D
What's On the Market Magnum Hunter markets Eagle Ford, seeks Utica JV
Chesapeake markets gas Topping Magnum Hunter Resources’ list of options to “harvest a lot of the
potential” of its asset base is selling the company’s Eagle Ford acreage, company
property in North Texas
management said in a Q3 conference call. Magnum has hired an undisclosed
Chesapeake has hired Meagher
investment bank to shop its 26,000-acre Eagle Ford position concentrated in Gonzales
Energy Advisors to help divest yet
and Lavaca Cos., Texas. The company has already shown the assets to more than 15
another Texas property, this one in
companies including other leaseholders in the counties. However, chairman
Grayson Co. on the
and CEO Gary Evans told Oil & Gas Financial Journal that Magnum is under
Oklahoma border. The
no duress to sell its Eagle Ford
~3,235-net-acre property At $25,000 per Eagle Ford acre,
acreage. “It’s just that we see our upside
(100% HBP, 84% NRI) had net Magnum’s 26,000 acres would net $650MM.
[in the Eagle Ford] as being defined,”
production of ~1,070 Mcfed (23% oil)
Evans explained. “We’ve done about as well as we can do in this play … [It] is a well-
during the 12 months ending July 31
oiled machine, and it might be better suited for someone with a lower cost of capital.”
from 14 wells (12 operated, 81% WI,
When asked during the conference call about value of the Eagle Ford acreage,
68% NRI). Net operating cash flow
Evans confirmed “that we’re in that range” of $20,000-$30,000/acre. At the midpoint
during that period was $165,121/month.
this would raise $650 million—allowing
According to the Meagher offering Magnum excited by drilling results of
Magnum to pare debt, fund capex and
memorandum, producing zones are the Utica neighbors Anadarko & Gulfport.
possibly redeem some preferred shares.
Oil Creek, Dornick Hills, Viola and Davis.
Although Magnum Hunter allocated 40% of its 2012 drilling budget to the Eagle
Upside potential exists through infill drilling
Ford with solid production and reserves results, the company’s two other core plays
Produces 1.07 MMcfed with upside from have a lower cost of capital and larger reserve bases. At 26,000 acres, the Eagle Ford
infill drilling, waterflood & recompletions. is Magnum’s smallest holding and accounts for only 15% of reserves. The company’s
~467,000 net acres in the Appalachian Basin account for 45% of reserves while its
opportunities, recompletions in existing
~138,000 net Williston acres hold the remaining 40% of reserves.
wells, waterflood potential over multiple
Meanwhile, Magnum is also discussing a JV to cash in on its Utica potential with
zones, and exploration into deeper horizons
several companies including foreign partners. The company said a deal could be
of the Woodford shale and Viola lime.
announced in January or February. Its Utica holdings are in Washington, Noble, and
Offers are due December 14 with an
Monroe Cos., Ohio and in Tyler Co., West Virginia.
effective date of December 1 and closing
by February 15. For more details, ask
for PLS Listing No. PP 1864DV or Hurricane-impaired GOM royalty interests on the block
contact the agent. As managing general partner of Tel Offshore Trust, Chevron has retained
EnergyNet to market and auction the partnership’s ORRI in shallow-water Gulf of
Mexico properties. The ORRI is equivalent to 80% of a 25% net profit interest in
Western offers royalty the Ship Shoal 182 and 183, South Timbalier 36 and 37, and Eugene Island 339 and
stakes in 100% stock sale 342 blocks. Although the entire royalty is up for sale, the trust partnership
Dallas-based Western Petroleum reserves the right to retain a
Resources engaged EnergyNet to sell all ORRI equals 80% of a 25% net profit
portion of its ORRI.
of the company’s assets in a 100% stock interest in six shallow-water blocks.
Damage inflicted by Hurricane Ike in
divestment. Over 30 years the company 2008 shut down production at Tel Offshore’s two most significant royalty properties.
has built a diversified portfolio of non-op Ike destroyed Eugene Island 339 platforms and wells—and Chevron is still plugging
ORRI and royalty interests in 118 wells in and abandoning wells and cleaning debris with completion expected by year’s end.
Texas, Oklahoma, Louisiana, Kansas and Chevron has inked a participation agreement with an unnamed company to fund
Mississippi with an average ~29 MMcfed redevelopment of the EI-339 platforms
gross production (36% oil). That total Ike destroyed Eugene Island 339; Chevron
partner will earn up to 65% WI to redevelop. and wells for up to 65% of Chevron’s
doesn’t include five new wells producing working interest.
288 boepd (75% oil). Another key Tel Offshore property, Ship Shoal 182 and 183, was also impacted
Western has three wells in completion by Ike mainly through the 10-month shutdown of a third-party gas pipeline.
stages and funding in place to drill four Production was also shut in for several weeks in 2010 due to a leak in an oil pipeline
wells through January. Average net cash and tank replacement.
flow and net revenue over the first nine Tel already sold 20% of its ORRI to RNR Production, Land & Cattle in October
months of 2012 were $33,985/month and 2011 for net proceeds of ~$1.49 million. The trust instructed Chevron to sell more of
$52,391/month. For further information the ORRI after RNR declined to exercise its option to purchase an additional 5.0%
request PLS Listing No. RR 1861PP or royalty interest. The auction is set for December 12.
contact the broker.
For general inquiries, e-mail info@plsx.com Access PLS’ A&D Transactions archive for previous A&D news

8. Transactions 8 December 5, 2012
BHP builds up Permian & Eagle Ford presence
BHP Billiton has been picking up small Permian bolt-on assets and is negotiating EAST TEXAS
larger packages up to 25,000 acres in the heart of its operations, says the head of the CHEROKEE CO., TX PROPERTY
Australian mining giant’s oil and gas division. Since its August 2011 acquisition of US 2,700-HBP Acres.
unconventional player Petrohawk the company has increased its Permian position 16% COON CREEK FIELD
from 378,000 to 440,000 acres Cretaceous, Rodessa Hill, Pettit-- PP
Has added small packages since buying -- & Travis Peak Sands
according to a September Petrohawk, now looking at bigger prizes. Test Depth: 9,000 Ft.
investor presentation. BHP is Total Production: 8.299 BCFG & 152 MBC
also looking to grow its Eagle Ford position when acreage becomes available—with Total Reserves: 13.0 BCFG & 203 MBC CRETACEOUS
particular interest in adding leasehold around its Black Hawk and Hawkville fields. Dry Hole Cost: $500,000
CONTACT SELLER FOR MORE INFO
Petroleum chief executive Mike Yeager told Upstream that the company thus far has PP 1177DV
been mostly adding assets of 1,000-5,000 acres in the Permian. In the Eagle Ford it has
been making small deals to consolidate its position and buying out minor stakeholders. SAN AUGUSTINE CO., TX PROPERTY
The Upstream article suggested one of the larger Permian deals BHP might be looking 1-Active Well. 624-Net Acres. HBP
at is a 22,000-acre Midland Basin package REBECCA JAMES LIME FIELD
J Cleo’s Reeves Co., Texas package in
being marketed by J Cleo Thompson. The OIL & LIQUIDS RICH PLAY PP
heart of Wolfcamp is a likely BHP target. New James Lime. 13,375 Ft. (TD)
property in Wolfcamp-prospective Reeves Wells Currently Being Drilled on Adjacent
Co. produces 5,000 boepd and is valued by PLS at over $500 million. J Cleo is the -- Lands Targeting James Lime Liquids.
county’s most active driller at 10 rigs as of November 30 according to Smith Bits with BHP ~97% OPERATED WI; 74.5% NRI 120
and Petrohawk collectively coming in second at five rigs. Bids were due in mid-October. Gross Prod: 7.0 BOPD & 120 MCFD MCFD
Total AFE Cost: ~$7,000,000
BHP not going after Yates, & other bidders rejected— CONTACT GENERATOR FOR DETAILS
One Permian prize Yeager said BHP is not seeking is privately held Yates Petroleum PP 1927
which has retained JP Morgan Chase to find a buyer for the company. Yates’ Permian
operations are focused in New Mexico where the company is a top-10 producer for both
NORTH LOUISIANA
oil and gas. However, Yeager said BHP is ill-equipped to hold Yates’ sizeable acreage CLAIBORNE PH, LA PROPERTY
position. “If we bought Yates we would have to put 10 rigs on it because it would have 5-Active Wells. 4-NonProducing.
rig obligations and we don’t have the people to do it,” Yeager said. LISBON FIELD PP
~32%-100% OPERATED WI FOR SALE
Yates has already rejected offers from Occidental and Concho Resources, the
Avg Production: 44 BOPD & 580 MCFD 580
Albuquerque Journal reported. The Yates family’s demand that the buyer maintain a Avg Net Income: $82,028/Month MCFD
large presence in Artesia, N.M. where it is headquartered and their structure of the deal CONTACT AGENT FOR UPDATE
as a stock sale may have suppressed the offer prices. PP 1859
ALABAMA
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TUSCALOOSA CO., AL PROPERTY
Capital that Preserves 500-Wells (CBM). ~43,000-Net Acres.
BLACK WARRIOR BASIN
Your Independence ROBINSON’S BEND FIELD PP
100% OPERATED WI; 75% NRI
We invest as your working interest Daily Production: 16,000 MCFD
Average Cash Flow: $1,000,000/Month
partner, not your boss.
Total Proved Reserves: 280.4 BCF 16,000
Total Proved Rsrvs (PV8): $85,600,000 MCFD
We are looking for acquisition and AGENT IS ASSEMBLING PACKAGE DATA
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David Hopson | Alec Neville | Lane Britain For the past 20 year, PLS has been the
central access point for buyers & sellers.
List with PLS today! It works!
For more information on listing, e-mail
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