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.