Energy Hunter Resources Announces Completion of Its First

San Andres Oil Play Acquisition in the Permian Basin

 

DALLAS, TX, December 4, 2017 — Energy Hunter Resources, Inc., an exploration and production company headquartered in Dallas, Texas, today announced that it has completed the acquisition of 9,413 net acres located in the San Andres oil play of the Permian Basin along with certain institutional investors. One hundred percent of the existing wells and lease acreage position, located in the Slaughter-Levelland Field of the San Andres formation, is held by production (“HBP”). Initial reservoir modeling indicates that there are more than 45 potential horizontal well locations based on the amount of acreage acquired with this acquisition which provides for approximately four laterals for every 640 acre spacing unit. Under terms of the agreement, Energy Hunter Resources, along with certain institutional investors, acquired the properties from an undisclosed seller in a cash and stock transaction with a total enterprise value of $20 million (as adjusted).

 

Acquisition Highlights

 

  • Approximately 9,413 net acres located in Cochran County, Texas
  • Low acquisition cost of $2,250 per acre
  • 100% of the acreage block is held by existing production (vertical wells)
  • Current gross production of approximately 72 BOE per day (vertical wells)
  • The San Andres formation is part of the Northwestern Shelf of the Permian Basin
  • More than 45 identified horizontal drilling locations and approximately 20 recompletion opportunities
  • 60% WI / 47% NRI (EHR Ownership)
  • Significant existing infrastructure including approximately 160 wells, power generation and electrical lines, salt water disposal wells, injection lines, surface pumps, tank batteries, pumping units, etc.
  • 90% oil cut

 

Gary C. Evans, Chairman and Chief Executive Officer of Energy Hunter Resources said, “The closing of our first San Andres acquisition positions our Company in one of the lowest cost and most economic oil plays in the United States today. Since we first announced this potential acquisition during the summer, we have subsequently seen a significant increase in operational activity in the play from both public and private companies, as well as a substantial increase in WTI oil prices from approximately $48 per barrel to the current price of $58 per barrel. While the play is economic down to $25 per barrel, current strip prices peg internal rates of return on our acreage at well over 100%. Our current plan is to drill a minimum of six wells per year on this acreage and engage in multiple low cost recompletion opportunities in order to drive additional production growth.”

 

Evans continued, “In addition to the 9,413 net acres acquired in Cochran County, Texas, the acquisition also included approximately $5 million of infrastructure that contains more than 160 wells, production facilities, oil and natural gas gathering lines, injection pumps, power stations and electricity lines and salt water disposal wells (“SWD”). This existing infrastructure is very important not only for the inherent value that it represents, but also because it enables us to immediately begin production sales upon completion of each new horizontal well drilled without having to engage in untimely delays and additional capital costs waiting on third parties. As part of this transaction, the Company also obtained the exclusive right to acquire an additional 9,600 net acres of San Andres leases located in Cochran County, Texas and adjacent to these properties acquired last week. This exclusive right expires in late January 2018. Our management team is continuing to explore additional opportunities for growth both organically and through acquisitions throughout this San Andres play.

About Energy Hunter Resources, Inc.

Energy Hunter Resources, Inc. is an independent oil company headquartered in Dallas, Texas with a mission to own and operate properties within some of the most prolific resource plays in the United States. Initially focusing on the Eagle Ford Shale and Permian Basin, Energy Hunter’s aim is to create substantial shareholder value through a balanced program of acquisitions and low-risk development and exploitation opportunities utilizing current generation horizontal drilling and fracture stimulation technology.

 Forward-Looking Statements

This press release may include ‘‘forward-looking statements.’’ To the extent that the information presented in this press release discusses financial projections, information, or expectations about our business plans, results of operations, products or markets, or otherwise makes statements about future events, such statements are forward-looking. Such forward-looking statements can be identified by the use of words such as ‘‘should,’’ ‘‘may,’’ ‘‘intends,’’ ‘‘anticipates,’’ ‘‘believes,’’ ‘‘estimates,’’ ‘‘projects,’’ ‘‘forecasts,’’ ‘‘expects,’’ ‘‘plans,’’ and ‘‘proposes.’’ Although we believe that the expectations reflected in these forward-looking statements are based on reasonable assumptions, there are a number of risks and uncertainties that could cause actual results to differ materially from such forward-looking statements. You are urged to carefully review and consider any cautionary statements and other disclosures. Forward-looking statements speak only as of the date of the document in which they are contained, and Energy Hunter does not undertake any duty to update any forward-looking statements except as may be required by law.

Legal Disclaimer

Energy Hunter Resources, Inc. has filed an offering statement on Form 1-A relating to its securities with the Securities and Exchange Commission but it has not yet become qualified. You may obtain a copy of the most recent version of the offering statement containing the preliminary offering circular with the following link: https://www.sec.gov/cgi-bin/browse-edgar?company=Energy+Hunter+Resources&owner=exclude&action=getcompany. This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. No money or other consideration is being solicited at this time with respect to such an offering, and if sent in response to these materials for such an offering, it will not be accepted. No securities may be sold, and no offer to buy securities can be accepted and no part of the purchase price can be received for an offering under Regulation A, until an offering statement is qualified by the U.S. Securities and Exchange Commission, and any such offer may be withdrawn or revoked, without obligation or commitment of any kind, at any time before notice of its acceptance given after the qualification date. An indication of interest made by a prospective investor in a Regulation A offering is non-binding and involves no obligation or commitment of any kind.

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