Olmos Liquids-Rich Leasehold Opportunity - Detring · Olmos Liquids-Rich Leasehold Opportunity...

Detring Energy Advisors

La SalleMcMullen

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5H 17H

7H 18H

14H Type Curve

Webb

La Salle McMullen

Duval

Dimmit

The Olmos reservoir has been highly productive in Webb, La Salle, and McMullen Counties, with over 500 horizontal and 1,500 vertical producing wells.

Location Map | La Salle & McMullen Counties, Texas

Prolific Horizontal Development Opportunity

64 geologically de-risked locations

– ~80-100% single-well IRRs

– ~14 months to payout

– $5.6MM D&C for 8,500’ ($660/lateral-ft)

Specific targeting of ~36 ft. high-porosity zone within the Olmos C has led to >2x improvement in recent well performance

Project supported by significant well control and seismic AVO

– Seismic shows Class 3 AVO characteristics consistent with AVO synthetics from rock physics modeling using control wells

– AVO data available for review

Sierra Resource Partners, LP (“Sierra”) has retained Detring Energy Advisors to market for sale its ~24,000 net-acre contiguous, operated position in the geologic sweet spot of the liquids-rich Olmos trend in La Salle

and McMullen Counties, Texas. Underpinned by strong production & cash flow, the asset is primed for development with an inventory of 64 highly-economic, long-lateral locations. Sierra has seen a material

uplift in recent well performance via landing zone optimization.

Olmos Liquids-Rich Leasehold OpportunitySierra Resource Partners, LP

August 2019

100% Operated Position~24,000 Net Acres (~97% WI)

Note: All values, including cash flow, reserves, PV10, and IRR’s, are based on an effective date of 9/1/2019 and five-year NYMEX strip as of 7/31/2019.

Highly-contiguous position in the geologic sweet spot of the prolific Olmos trend

– Large mineral estates across 3 combined owners allows for long-lateral dev’t and efficient surface facility build-out

Minimal drilling requirements to maintain the entire position

– 1 well in 2019, 3 wells in 2020+

– Flexibility to develop within cash flow or accelerate and bank obligation wells

Liquids-Rich Production~12 MMcfed (~54% liq.)

~$12MM NTM PDP cash flow funds continued near-term development

PDP: ~$45MM PV10 (~33 Bcfe net reserves, 7.5 years R/P)

3P: ~$370MM PV10 (~470 Bcfe net reserves)

Extensive gathering, processing, and transportation infrastructure in place

– Advantageous location for marketing & transportation yields realized pricing of +$1.46/bbl to WTI and on-par to HHUB

Highly Economic Olmos Development Supported by Recent Wells Landed in High-Porosity Olmos C Interval

Sierra AcreageOlmos Hz WellOlmos Vt Well

STS ‘A’ 14H9,646’ lateral

IP30: 9.6 MMcfedEUR: 9.0 Bcfe





STS ‘A’ NMC Unit 1 17H9,789’ lateral


Locator Map

Sierra AcreageSierra Olmos Hz WellOther Olmos Hz WellSierra Location Unit

Legend

IP-24: 13 MMcfed (54% liq.)EUR: 10 Bcfe (52% liq.)


La SalleMcMullen

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August 2019


Sierra has completed extensive seismic interpretation, petrophysical analysis, core studies, mapping and static modeling efforts to understand the reservoir properties and extent of the Olmos play. Applying those learnings

to the recent drilling programs has geologically de-risked the acreage.

The targeted landing zone is an approximately 36’ thick high-porosity interval with rock quality that increases away from the Edwards Reef onto Sierra’s acreage (to the southeast). This cross section highlights the landing zone and

the underlying high net-sand interval, showing consistent thickness and porosity across the position.

Hunt Oil STS North Un1H

GR RES/DEN

Carrizo O&G in S. Texas 1

GR RES/DEN

SP5 AWA 1027H Pilot

GR RES/DEN

BHP STS ‘A’ 4H

GR RES/DEN

STATOIL NMC 201H

GR RES/DEN

Legend

Surface Hole Locations

1 5432

A A’

Locator Map

La Salle & McMullen Cos. La Salle

McMullen

Sierra Acreage A.W.P Field(Analog)0 1 2 3 4 5

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Landing Zone

High Net Sand

Depositional Model

Fault ShadowsLocal faulting mutes

AVO response

Petrophysical Analysis Confirms Optimal LZ

Zone Type Log Property Value

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Gross Thickness 36’

Avg. Porosity 11.7%

Avg. Perm. 0.18 mD

Net BVH 0.055%

High Net Sand Interval

Targeted Landing Zone

Olmos C | AVO MapLa Salle and McMullen Counties, Texas

Cross Section from Shelf to Developed Turbidite Reservoir

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August 2019 September 2019

Derek Detring Melinda Faust Matt Loewenstein Richard BallPresident Managing Director Director Vice President(713) 595-1001 (713) 595-1004 (713) 595-1003 (713) [email protected] [email protected] [email protected] [email protected]

Jonathan Bristal Kyle Vesevick Paul NgoAssociate Associate Analyst(713) 595-1010 (713) 595-1006 (713) [email protected] [email protected] [email protected]

Preston Peeples Anthony Rojas Payne WinterAnalyst Analyst Analyst(713) 595-1016 (713) 595-1009 (713) [email protected] [email protected] [email protected]

Key Process Contact

This Information Flyer is based on material provided by Sierra Resource Partners, LP and its affiliates (“Seller”) and is offered to interested parties for the sole purpose of providing an overview of anopportunity to acquire certain of the Seller's assets (the "Transaction"). This Information Flyer is delivered on behalf of Seller by Detring & Associates, LLC ("Advisor"). The information contained in thisInformation Flyer ("Information") is for informational purposes only and does not constitute an obligation by Seller to enter into any future transaction. The Information should not be relied upon by therecipient in considering the Transaction, and the recipient should consider its own financial situation when evaluating the Transaction. This Information Flyer does not constitute investment, legal, financial,tax, accounting or other counsel of any kind, and the recipient should conduct its own independent examination and assessment of the Information, including obtaining investment, legal, tax, accounting andsuch other counsel as it considers suitable. Seller may change or otherwise modify the transaction process at any time without notice to the recipient, including but not limited to accepting any proposal at anypoint in time, altering the dates of the process, or terminating the process completely without defining any reason and without any liability to any interested party. Advisor and its directors, employees,consultants and agents ("Group") make no representation or warranty as to the accuracy, completeness, timeliness or reliability of the contents of this Information Flyer or any Information provided duringthe course of the Transaction process. The Information has been prepared on the basis of publicly accessible information and material made available to Advisor by Seller. Advisor has relied upon andassumed, without independent verification, the accuracy or completeness of all such information, which does not claim to be all-inclusive or to contain all of the information that may be relevant to theTransaction. The recipient acknowledges that conditions may change and that the Information may become out-of-date as a result. Advisor is under no obligation to update or correct this Information. Sellerand Advisor are under no obligation to provide the recipient with access to any further information. Seller and Group shall have no liability for any representations (expressed or implied) other than, in thecase of Seller, those given by Seller in the purchase and sale agreement, for any written or oral communications with any Interested Parties in the course of their review of the Transaction, or for any impliedterms or obligations arising from operation of law or otherwise. To the maximum extent permitted by law, no member of the Group accepts any liability (including, without limitation, any liability arising fromfault or negligence on the part of any of them) for any loss whatsoever arising from the use of this Information Flyer or its contents or otherwise arising in connection with it or from the use of anyInformation provided throughout the course of the Transaction procedure. Certain statements contained herein may constitute forward-looking statements which involve risks and uncertainties that couldcause actual events or results to differ materially from the projected or expected events or results implied or conveyed in such forward-looking statements. In particular, statements regarding oil and gasreserves may include the implied assessment that the resources described can be profitably produced in the future, based on certain estimates and assumptions. No constituent of the Group represents orwarrants that such forward-looking statements will be achieved or will prove to be correct. Actual future results and operations could vary materially from the forward-looking statements. Similarly, norepresentation or warranty is made that the assumptions on which the forward-looking statements are based may be reasonable. No audit, review or verification has been undertaken by the Group or anindependent third party of the assumptions, data, results, calculations and forecasts presented or referred to herein. The recipient acknowledges that neither it nor Advisor intends that Advisor acts or beresponsible as a fiduciary to the recipient, its management, stockholders, creditors or any other person. Each of the recipient and Advisor, by accepting and providing this Information Flyer respectively,expressly disclaims any fiduciary relationship and agrees that the recipient is responsible for making its own independent judgments with respect to any transaction and any other matters regarding thisInformation Flyer. Subsequent modifications may be provided as required.

Please contact Melinda Faust to request a confidentiality agreement or to learn more about this opportunity. Please route all communications through Detring and do not contact Sierra directly.

Process Calendar

Detring Energy Advisors | Contact Information

Sierra anticipates PSA execution by mid-October 2019, with closing occurring by November 30th.

VDR Opens

Data Rooms

Bids Due

Holidays

August 2019


Olmos Liquids-Rich Leasehold Opportunity - Detring · Olmos Liquids-Rich Leasehold Opportunity...

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