Areas of Operation
Leasebank investments comprise the acquisition of mineral rights (i.e., the leasing of acreage) with the aim of selling such rights within three years or less with an objective of generating a capital gain (with the further objective of that gain being treated as a long-term gain with the resulting favorable tax consequences) or retaining an economic interest in the form of royalty payments or a carried interest such as a back-in-after-payout (“BIAPO”). In such case, the Waveland fund may participate in the drilling of pilot wells with the objective of proving up the hydrocarbon-producing potential of the project. In other cases, it may be possible to sell the project at a profit without taking the risk of drilling pilot wells.
Waveland’s investment activities in the Mid-Continent region of the United States have been made alongside some of the most experienced and respected operators in the industry. Since 2002, Waveland has participated in drilling hundreds of wells in central Oklahoma. Through 2016, these wells have produced over 3.7 million barrels of oil and 113 billion cubic feet of gas plus associated natural gas liquids. Waveland expanded its operating-partner relationships with the addition of Tulsa-based Orca Resources, LLC in 2008, Dallas-based Trail Ridge Energy Partners II, LLC in 2012, and DJR Energy, L.P. in 2016. Each of Waveland’s partners possess strong geologic assessment abilities, extensive engineering expertise in horizontal well design, drilling and completion, and state-of-the-art fluid management. This expertise results in consistent production efficiencies.
Orca began generating oil and gas exploration projects in 2003 with a focus on unconventional plays utilizing dewatering operations. Although Orca began in 2003, its staff played roles in developing the dewatering production techniques at its earliest stages in the West Carney Hunton Field in Central Oklahoma in 1998. Orca carefully identifies drilling opportunities in reservoirs previously missed or misunderstood by the industry. Utilizing a variety of specialized horizontal drilling techniques and equipment, Orca is able to capitalize on these opportunities by efficiently producing oil and gas while removing and safely disposing vast quantities of salt water from the reservoir formation. Orca continues to be a leader in recognizing potential plays with new areas developing in central and western Oklahoma. Currently, Waveland and Orca are developing over 6,400 acres in Southern Dewey County in the Anadarko Basin of western Oklahoma where the “Scoop” and “Stack” plays we believed to converge.
Permian Basin – West Texas
Waveland entered the Permian Basin in December 2012 with the acquisition of approximately 18,000 acres in Scurry County, Texas, targeting the emerging Cline Shale and Mississippian plays. The Cline Shale formation within the Midland Permian Basin is an oil/liquids weighted play that includes several pay zones and may contain significant amounts of recoverable oil. Waveland “leasebanked” this position on behalf of Trail Ridge, and Trail Ridge subsequently secured multi-million dollar commitments from Riverstone Holdings and Trilantic Capital Partners. Then in 2014 and 2015, Trail Ridge acquired 7,000 acres in the “heart” of the Wolfcamp play in the Midland Basin, a project in which Waveland has 7.5% direct working interest.
San Juan Basin – Northwestern New Mexico
Waveland, alongside its Colorado-based operating partner DJR Energy, LP, entered the San Juan Basin in 2016 with the acquisition of over 5,000 acres in the oil window Gallup formation of the San Juan Basin in New Mexico. Based on the analysis of over 35,000 electronic logs to form a regional geologic model in the San Juan Basin, DJR has concluded that the San Juan Basin is an economically viable basin even at today’s hydrocarbon pricing environment. In addition, DJR believes that the San Juan Basin’s upside value potential will be comparable to that of the DJ Basin 6-8 years ago, and the San Juan Basin is expected to yield strong economic results in an environment of rising hydrocarbon pricing. In addition to direct experience in the San Juan Basin, DJR has extensively analyzed and mapped other productive formations in the rocky Mountain region.