Crest/Guggenheim Mezzanine Funding, Oklahoma and Texas

In 2010, Crest formed a venture with mezzanine funding from Guggenheim Partners, LLC. to pursue several Crest properties chiefly in the Texas Panhandle and Southern Oklahoma.

  • The prospects wells varied from a 3,300’ Red Fork test at Burbank to a 19,800’ MD horizontal well in Wheeler County, Texas.

  • Crest drilled (or caused to be drilled) 36 wells with one dry hole, the 3,300’ Burbank test.

  • Only one other Crest operated well was an economic failure.

  • Crest operated 16 successful horizontal wells at depths from 13,800’ MD to 19,800’ MD.

  • The best horizontal well results were seen in the Crest #4-21 Buckingham well which has estimated ultimate reserves of 450 MBO and 2.3 BCFG.

  • The top horizontal producer has an EUR of 8.1 BCFG and 258 MBO.

  • Two horizontal wells generated a 4-5/1 ROI and over a 100% IRR.

  • A conventional vertical well has an EUR of 12 BCF at a cost of $3.2 MM. ROI for this well is easily 10/1 with an IRR calculating well over 100%.

  • In aggregate, the Mezzanine venture realized over a 3/1 ROI. Crest hit the third hurdle rate.

  • According to Guggenheim personnel, Crest was their best performing portfolio company.