Background/Challenges
At the beginning of 2017, the equity sponsor of a management team that was struggling to manage an East Texas PDP field (sponsored asset) with a high-water cut (1%
Results/Conclusions
- Stellus Capital – equity sponsor
- East Texas PDP field (sponsored asset)
- Initial need: Operational advisory to management team that was struggling with production in a high water drive field (1% oil cut, ~25,000 bbls of water per day)
- Provided operational advisory, engineering recommendations, and execution of critical production improvement efforts
- Secondary need: Equity Sponsor needed interim contract operating to improve production, lower cost and carry through divestiture.Results
- Peak production improvement ~40%.
- Production improvement at divesture (Dec 2016 vs Dec 2017) ~28%
- Successful divesture; equity sponsor went from “under water” to “made whole”
