Petroshale letter to Shareholders..
Throughout calendar 2013, we enhanced PetroShale's strategic position, which included changing the Company's year end to December 31. As a result of this change, this report provides our results and discusses our achievements for the six month period from July 1, 2013 to December 31, 2013.
As part of our ongoing strategy to acquire and consolidate working interests in the prolific Williston Basin in North Dakota, we completed several acquisitions that we anticipate will contribute to growth in production, reserves and cash flows. In August, 2013, we partnered with Slawson Exploration Inc. ("Slawson"), one of the largest private operators in the Williston Basin, to acquire certain assets within the Stockyard Creek field (situated in southern Williams County, North Dakota). These assets included 106 net leased acres giving the Company a 5.5% interest in a 17 well drilling program over three 640 acre sections. The Stockyard Creek assets are operated by Slawson, and to date include the successful drilling and completion of five wells, including four new wells that came on production in February 2014.
Subsequent to the end of 2013, two additional acquisitions were completed. The first was the acquisition of the North Antelope Project in McKenzie County, North Dakota, operated by EOG, a large and experienced operator in shale oil plays, including the Bakken. The Antelope Project provides PetroShale with an 18.75% working interest in a proposed drilling unit, which has been spaced for the drilling of 8 wells. Based on current capital plans, we expect results from those wells should have a positive impact on PetroShale's production and cash flows later in 2014. The second acquisition we completed after year end 2013 was the purchase of 245 net held-by-production acres, giving the Company an approximate 19% working interest in a 1,280 acre drilling unit in Williams County, North Dakota.
As a result of our activities to date, PetroShale's production has grown to approximately 240 boe/d currently. Following the acquisitions completed in the first quarter of 2014, our pro forma P+P reserves increased to approximately 2,188 Mboe (1,750 Mboe net of royalty), with a NPV10 of $44.1 million.
In addition to growing the Company's asset base, we also took steps in the latter half of 2013 to strengthen our Board and management team. PetroShale's management team and Board have extensive experience in managing and governing high-growth oil and natural gas entities. We look forward to a focused expansion of our operations in the Williston Basin.
We appreciate your continued support of PetroShale, and look forward to updating you on our progress and achievements in our next financial report, for the first quarter ended March 31, 2014.
M. Bruce Chernoff, Executive Chairman and CEO
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