SAN JUAN RESOURCES, INC.
Denver, Colorado, United States
SAN JUAN RESOURCES, INC.
!
Oil & gas exploration and production in the San Juan Basin of New Mexico and Colorado.
About SAN JUAN RESOURCES, INC.
San Juan Resources, Inc. (SJR), founded in 1990 by Jerry McHugh, Jr., focuses on natural gas and oil exploration and production in the San Juan Basin of New Mexico and Colorado. San Juan Resources operates ~ 40 wells in the San Juan and has non-operated working, overriding royalty, and royalty interests in 300+ wells across New Mexico counties of San Juan, Rio Arriba, Sandoval, and La Plata County in Colorado. Production comes from conventional Dakota, Gallup, Mesaverde, and Pictured Cliffs formations as well as the unconventional Mancos Shale and Fruitland coal-seam reservoirs.
Since inception, the company has had steady growth and increased reserve base every year until 2012. However, with the lower commodity pricing, higher cost unconventional drilling, SJR pivoted and has been acquiring fee and Federal leases. SJR has developed favorable drilling projects and sold them to industry partners. Since 2011 SJR has accumulated 45,000 acres of fee/Federal leases.
SJR conducts its financial, regulatory, and accounting activities ethically with compliance in tax and royalty matters, monthly revenue distribution and billing, and adherence to local, state, and federal laws. In addition, the company is a conscientious steward of the land on which it operates, working with landowners, ranchers, and other stakeholders in a proactive and positive manner.
SJR's offices are located in Denver. Jerry is the President and owner, long time employee, Lori Walters is company Controller/Financial manager and Jerry's right-hand person. Jerry manages contract Landmen and land brokers are utilized in the field. In addition, Jerry uses consulting services of geologist, Rich Bosher, and engineer, Duncan Shepherd. Field and drilling operations are conducted by Walsh Engineering, Farmington, with petroleum (drilling and completion) engineers, foremen, switchers for SJR operated wells.
Description of Services
a) San Juan Basin Horizontal Mancos Oil Project:
- Surrounded by 50 MMBO, 250 BCF vertical production
- 25,000 Acres, Federal and Fee (40% fee, 40% HBP)
- 500-950 MBOE EUR per well, strong show wells
- Two Federal Units are formed and APD's approval Q1 '23
- Very low-cost entry into Project
- Size of the Prize: 250-Mancos 1-mil lats (Mancos C & B)
Phase 1:
- 30 Mancos 1.5-mi lats (Mancos C & B)
- NPV15 $176 MM
- ROI 98%, @ 12/2023 strip adjusted to net wellhead pricing
- 17 MMBO; 49,000 MMCF
- $5.7 MM D&C: 1.5-mi laterals, long-term drilling program efficiencies of scale
Deal Terms:
- 10% carry in 3 wells earns pro rata share of AMI leasehold
- 85% IRR, 1.3 year payout, single well economics
- Project shovel ready
- 80% committed to project (20% available)
Other key attributes:
- Existing gas gathering infrastructure -take away up to 7 mmcfpd
- Stable New Mexico State regulatory structure due to Permian Basin anchor
- Multiple producing formations-- Dakota--Conv, Unconv (2 zones) Oil, condensate, and Hi Btu Gas AND Pictured Cliffs--Hi Btu Gas
- DJR Energy and Enduring are developing Mancos HZ averaging 8900 and 7500 MBOEPD respectively, EOG has 125-well HZ program nearby
b) San Juan Basin Horizontal Mancos Dry Gas Project:
San Juan Resources has assembled a 6400-acre Mancos Dry Gas Project with over
36 projected two-mile laterals and seeks partners to take to the next level.
General Overview:
- 19 BCF EUR per 10,000' lateral
- 2 NEPA Approved 7-acre pads in Carson National Forest, 3 APD's (multi-well pads)
- Lateral analogs significantly de-risk project, lease line offset drilled in 2011
- SJR owns controlling presence in this area
Size of Prize:
- NPV15 $194MM (Gross, fully developed)
- ROI to investor 55%;
- 32 Unit wells-- Mancos B and C zones
- Gross Reserves- 600 BCF
Deal Terms:
- SJR to have 15% carry through the tanks in 4 commitment wells
- Investors earn pro rata share of leasehold
- Single well economics (promoted) - 30% IRR, 2.5 year payout
Other Key Attributes:
- SJR to operate or operations available
- Approval includes two 7-acre well pads -- up to 36 horizontal wells includes water lines, gas gathering rights-of-way in Forest, Unit plan
- 80 MMFCD Cabresto Gathering line (12") bisects Unit--will be available for take away
- $13.5 MM for first 2-mi lateral, (with drilling efficiencies < $11.5 MM)
- 19 Bcf EUR two-mile laterals, a dozen drilled by BP & WPX a township to west.
- 6 Bcf EUR one mile lateral, drilled ½ mile on eastern edge of project by Black Hills Gen1 frac (634#/ft).
- Pipe water into area from Lake Navajo.
What we do
INTERESTS OF SAN JUAN RESOURCES
1. Aztec Conventional Drilling and Production SJR operates 13 wells in this area, commingling Blanco Mesaverde and Basin Dakota in most of the wells.
2. Aztec Fruitland Wells, SJR operates ten coalbed methane wells, producing from the Basin Fruitland Formation.
3. Westflank Unconventional Drilling SJR operates acreage north of Farmington, drilling conventional Blanco Mesaverde and Basin Dakota reservoirs. SJR has undrilled gas units on these lands and offer the potential for virgin reservoir conditions. HZ drilling in Mancos, Niobrara, and other zones.
4. La Plata, New Mexico, overriding royalty, Hilcorp and Enduring operated Basin Fruitland coal-seam wells, San Juan County, New Mexico
5. West Lindrith Gallup Dakota & So Blanco PC Production, SJR operates 4 Pictured Cliffs and 5 Gallup Dakota wells. HZ drilling in Mancos, Niobrara in this area......
6. San Juan 32-7 Unit, operated by Hilcorp. SJR has an interest in 8 wells while owning a non-unit participating interest in this Basin Fruitland coal-seam reservoir, plus interests in Dakota and Mesaverde wells.
7. Rosa Unit, operated by LOGOS Resources. SJR has working interest in this unit. With an interest in 25 wells, SJR has a non-unit participating interest in Blanco Mesaverde, Dakota, Mancos, and Basin Fruitland coal-seam methane production. Mancos produces HUGE Vols of dry gas in the Rosa.
8. La Plata County Wells, operated by Maralex Resources and Red Willow. SJR has working, overriding royalty, and royalty interests in 11 Basin Fruitland pool coal-seam methane wells.
9. Bear Canyon Unit, operated by High River Resources. SJR has non-unit participating working interest in 6 Bear Canyon Unit wells, Gavilan Mancos reservoir
10. Carracas Canyon area, Fruitland coal-seam production, overriding royalty, Morning Star Operators- wells, Basin Fruitland and PC pool, Rio Arriba County, New Mexico.
11. Canada Ojitos Unit, Benson-Montin-Greer-operated unit, Puerto Chiquito Mancos (West) Rio Arriba County, New Mexico. SJR owns a small working interest.
Life at SAN JUAN RESOURCES, INC.
AFFILIATED OPERATORS AND CONTRACTORS
San Juan Resources has affiliated interests throughout the San Juan Basin of New Mexico and Colorado with the following companies:
Operators
- Benson-Montin-Greer Drilling Company
- Dugan Production Corp.
- Enduring Resources
- High River Resources Operating
- Hilcorp
- LOGOS Operating
- Maralex Resources
- Morningstar Operating
- RIM Operating
- Red Willow Operating
Contractors
- Aztec Well Servicing, Aztec, N.M.
- Halliburton Energy Services, Farmington, N.M.
- Walsh Engineering, Farmington, N.M.
- Hurricane Air & Swabbing, Farmington, N.M.
- Various small contractors/service companies, San Juan Basin
