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.