Like the wheeling and dealing common in a game of Monopoly, energy companies are surveying their competitors, as well as their assets. Appealing to the same notion, Alpha Energy, Inc.seems to be scouting what looks attractive.
Kadence Petroleum’s Logan 2 Project assets in Oklahoma are included in an option agreement allowing for purchase by Alpha Energy. This appears lucrative as Alpha commissioned a reserve report that identified 16 wells currently offline but could be returned to production with little work.
What is the Logan 2 Project?
Situated in the Cherokee Uplift in central Oklahoma, the Logan 2 Project consists of approximately 6,900 acres of production, both developed and undeveloped. Mainly from the Hunton Formation, this play includes 34 wells that were formerly produced. Recompletion opportunities exist here. Drilling data and logs show that six wells could be made viable. According to an engineering reserve report, 12 undeveloped locations palatable for drilling are present in the Hunton, Viola or Layton Formations. Additionally, the report provides for more than 340 barrels of oil and 610 million cubic feet gas in net reserves.
According to John Lepin, Alpha Energy’s Chairman and Chief Financial Officer, the Logan 2 Project engineering reserve report potentially downplays their position.
“We believe the full value of this Project, with its substantial acreage position and minimal drilling to date is understated by our engineering reserve report. The Option Agreement and eventual PSA over Logan 2, and our other Project areas previously announced (Coral and Rogers Projects) combine to provide Alpha with a substantial base of operations in the Cherokee Arch, an area where conditions remain economic even with the current price regime,” said Lepin. “These are the three projects we had set our sights on back in 2018. With them, Alpha has demonstrated its ability to stay focused and deliver on its promises to investors.”
Lepin expressed satisfaction on multiple levels in the acquisition of the Logan 2. Appeasing stockholders with a strong financial influx accomplished through purchasing the assets at a winning price ranks at the forefront.
“We are pleased to have been able to acquire such a high-quality project in Oklahoma’s Cherokee Platform and at a very attractive price, and we are extremely excited about the commencement of the development of the Logan 2 Project. Our initial focus will be on the acquisition of producing wellbores, which gives us some financial flexibility and allows us to grow production, cash flow and reserves through a capital program that is expected to be funded with internally generated cash flow,” said Lepin. “As we grow and develop our Oklahoma assets, we will continue to focus on maintaining our strong balance sheet and financial flexibility. The Cherokee Platform is one of the few domestic plays that provide return-justified drilling opportunities in the current price environment.”
Nick Vaccaro is a freelance writer and photographer. Besides providing technical writing services, he is an HSE consultant in the oil and gas industry with eight years of experience. He also contributes to Louisiana Sportsman Magazine and follows and photographs American Kennel Club field and herding trials. Nick has a BA in Photojournalism from Loyola University and resides in the New Orleans area. 210-240-7188 [email protected]