Exploration & Production | Quarterly / Earnings Reports
Dixie Energy Increases Black Warrior Basin Holdings in 2013
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Dixie Energy Trust has reported its financial results for the quarter ended September 30, 2013.
As of September 30, 2013 the cash position of the Trust was $3,785,496 with working capital of $5,515,658.
Highlights
- Dixie completed its previously announced acquisition of additional working interest from one of its joint venture partners for US$5.5 million. The Fletcher Acquisition tripled Dixie's net acreage in Maple Branch (Mississippi) to 4,530 acres, increased its net acreage at Strong Field (Mississippi) by 570 acres, and included 985 net acres in Queens Prospect (Alabama).
- Completed the second closing of the private placement financing. In total, Dixie raised gross proceeds of $13.3 million and issued 16.6 million trust units.
- Completed three minor acquisitions for additional oil and gas leases and a gas gathering system in the Black Warrior Basin. Dixie acquired 265 net acres of oil and gas leases in the Star prospect (Mississippi) and acquired a 45% working interest in the McKinley Creek gas gathering system. In conjunction with the McKinley Creek gas gathering system, Dixie acquired 45% of an 80% working interest in four oil and gas wells and approximately 680 net acres of oil and gas leases held by production in the Hamilton & West McKinley Creek field (Mississippi).
- Dixie completed its previously announced acquisition of Dogtooth Investments Ltd. for $9.3 million, comprised of $1.25 million in cash and 10,062,500 non-voting exchangeable shares in the capital of Dixie Energy Holdings (Canada), Ltd.
- The Dogtooth Acquisition increased Dixie's interest in the Maple Branch prospect (Mississippi) to 6,050 net acres and included a 10% working interest in the Holliman 7-13 No.1 and Holliman 7-13 No.2 oil wells; added 120 net acres of oil and gas leases in the Hamilton & West McKinley Creek prospect (Mississippi); a 9.27% working interest in the Amos 36-3 oil well located in the Brooklyn field in Conecuh County, Alabama; and doubled Dixie's net acreage at Brooklyn Queens prospect (Alabama) to 1,970 acres.
- During the third quarter of 2013, Dixie's average oil and gas production was 64 boepd (68% oil) and its netback per boe was US$51.87. Efforts to optimize production from the Holliman 7-13H No. 1 and Holliman 7-13H No. 2 wells during the quarter resulted in increased operating expenses, reduced production days and a decrease in netback. Natural gas production from the wells is currently being flared however Dixie anticipates gas production being tied in early in 2014.
- Dixie and its partners drilled 3 (1.2 net) oil wells (Holliman 7-12 No.1, Holliman 17-6 No. 1 and Holliman 18-5 No. 1) in Maple Branch. The wells are nearing completion and subject to successful completions are expected to come onto production prior to year-end.
- Dixie and its joint venture partners spud the Forest Homes No. 1 well (9.9% working interest) in the White Castle Dome prospect (Louisiana) on June 1, 2013. The Forest Homes No. 1 well, in Louisiana, came on production on August 28, 2013 and averaged 163 boepd (16 boepd net) (100% oil) through to September 30, 2013. On November 5, 2013 the Forest Homes No. 2 well (Louisiana) was spud and drilling operations for the well are ongoing.
For the balance of the year, Dixie and its partners in Maple Branch are planning for the fracture stimulation of the fourth well (Holliman 17-6 No. 1), anticipate finishing the drilling operations of the fifth well (Holliman 18-5 No. 1) and intend to perform fracture stimulation prior to year-end on the fifth well; this will result in a total of five wells drilled and completed in Maple Branch in 2013.
Dixie's 2014 capital program is currently under review by management and the board - details will be announced in due course.