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Crest/BP Joint Venture, Hemphill and Roberts Counties, Texas

Crest formed a four-prospect joint venture with British Petroleum (“BP”) on assets in the Texas Panhandle that BP acquired through the Amoco merger.

  • The prospects varied from a 7,700’ Tonkawa Prospect to a 12,500’ Morrow Prospect.

  • Crest operated all properties through pipeline connection.

  • BP had an option to take over operations once the properties were brought onto production.

  • BP elected to have Crest continue operations on larger value properties.

  • The best well results were seen in the #3 Killebrew well has produced 4.0 Bcf and generated a 7.5x ROI and over a 100.0% IRR.

  • The lowest IP Crest well tested 700 Mcfd at 7,400’ with a completed cost under $900,000.

  • The lowest single well ROI was 2.7x with a 26.7% IRR.

  • In aggregate, the joint venture with BP generated a 4.6x ROI with an 87.0% IRR to the investor group.

  • According to BP, the Crest joint venture far exceeded returns in BP’s other ventures.

  • BP encouraged Crest to make a new joint venture proposal.

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