Jericho Oil (JCO.V) has announced what could best be described as a game-changing event as the company has signed a definitive agreement to acquire a 50% working interest (WI) in a producing oil asset in Oklahoma. The oilfield has 50 existing wells and consists of 30,000 net acres with a reserve to production ratio of 8.5 years, which is pretty nice!
The average production of the oilfield in Q3 2015 was 427 boe/day (of which 213 barrels will be attributable to Jericho Oil), and this will triple Jericho’s current production rate. That’s also important for the company’s consolidated production costs as for instance the General and Administrative expenses can now be divided over more barrels of oil that will be produced, reducing the G&A expense per barrel.
Jericho Oil is continuing to execute on what it has been promising the market and it’s starting to roll up some distressed assets. This should bring the total attributable production rate to 350 barrels per day by the end of this year, and we’re now really looking forward to what this company might achieve in 2016 as the current slump in the oil price will undoubtedly unlock additional opportunities. Our bold guess? An exit rate of 1,000 barrels per day by the end of next year.
> Click here to go to Jericho Oil’s website
Disclosure: The author holds a long position in Jericho Oil. Please see our disclaimer for current positions.
