Lycos Energy Inc. is pleased to announce the addition of 1,500 boe/d (100% oil) production and 1,808 Mboe of producing reserves(1) in the Lloydminster area (the "Assets"). Lycos' total current production is now over 2,700 boe/d (99% oil).
Lycos completed the Acquisition(2) on February 28, 2023 for a purchase price consisting of $50.0 million in cash and the grant of a 3% gross overriding royalty to the former ownership group (the "GORR") on any newly drilled wells on the acquired lands.
The Assets substantially increase Lycos' inventory of high rate, high return multi-lateral drilling locations, adding over 40 net locations(3) within the Mannville Group. Lycos has operated the Assets since the fall of 2021 and has drilled a total of 8 multi-laterals on the Assets. These wells have achieved an average IP90 of 197 boe/d.
• $50.0 million cash purchase price plus a 3% GORR
• Operating netback(4) of over $49/bbl at $75.00 WCS/bbl
• Producing oil reserves of 1,808 Mboe(1) driving a producing recycle ratio(4) of 1.77
• 1,500 boe/d addition to the Company's current production
• Increase of more than 40 multi-lateral drills to current inventory
• Decrease in corporate pro forma operating expenses of more than 30%, driving a pro forma Lycos current operating netback(4) of $38.65/bbl at $75.00 WCS/bbl
• Adds 56.2 net sections of land (45.8 undeveloped)
• All acquired volumes will be processed and sold through existing Lycos facilities
The Company is currently in the process of reallocating capital and expanding its drilling budget based upon the new portfolio of 100% working interest opportunities resulting from the Acquisition. Guidance will be released in early April 2023.
With this expanded inventory, Lycos expects to more than double current production by the end of 2024.