Jonah Energy will present at EnerCom’s The Oil & Gas Conference® 21 on Aug. 18, 2016.
Jonah Energy is a private acquisition and development company focused on the recovery of hydrocarbons from the Jonah field in western Wyoming. The Jonah field was one of the largest onshore natural gas discoveries in the early 1990’s, with estimated original resource of 19.2 Tcf concentrated within an area of about 24,000 acres.
The company was created in spring 2014 with an investment from TPG Capital and it closed the company’s first acquisition in Jonah field on May 12th, 2014 with Encana Oil and Gas. The agreement included 24,000 acres and over 1,500 active wells. Estimated proved reserves for the property were 1,493 Bcfe as of year-end 2013 before the transaction was consummated. The deal also included the Normal Pressured Lance (NPL) acreage (106,000 net acres), this acreage is largely undeveloped. The price for these assets was $1.8 billion as reported by Encana on March 31st,2014.
Jonah Field was expected to produce 550 MMcfe/d (220,750 MMcfe/yr) in 2015. David Honeyfield, Vice President and Chief Financial Officer of Jonah Energy, emphasized that the strategy moving forward would be to grow production, continue capital investment program, and generate free cash flow.
This strategy has shown progress, In 2015 the free cash flow generated by the company amounted to $141 million according to a March 10th, 2016 report by Moody’s, and of this, $136 million was used to pay down revolver borrowings. This same report predicts the 2016 free cash flow to be $60 million at a price point of $2.25/MMBtu. With natural gas prices reaching into the high $2 range recently, this could be underestimated.
Well pad and facilities development in the Jonah Field and NPL acreage have been complicated due to sage grouse habitat protection in the west. In order to continue field development in the Jonah field the company put forward a proposal to amend a previously approved plan to reduce acreage impacted by 245 new wells from 1,315 acres to 232 acres. This plan was approved by the BLM as posted on March 4th, 2016. This will allow the company to continue with the development of the 1.9 Tcf of 2P reserves, of which 39% is considered developed.
During the private E&P company panel discussion at the Oil and Gas Conference® 20 in August 2015, decline has been reversed in the Jonah field. Another detail was the drilling of a 2014 well with the highest 30 day IP rate in the history of the Jonah field.
EnerCom’s The Oil & Gas Conference® Denver – August 14-18, 2016
Jonah Energy will be part of a Private Company Panel at EnerCom’s The Oil & Gas Conference® 21 in Denver on Thursday, August 18, 2016 at 1:00pm EDT. Conference information and registration for this year’s EnerCom conference may be accessed here.
