Oil and natural gas exploration company, Byron Energy Limited (ASX: BYE) has made a significant step in expanding its position in the Gulf of Mexico by acquiring SM58.
In an announcement made on 7 March 2019, Byron Energy announced that it has completed the acquisition of South Marsh Island Block 58, SM 58 E1 producing wellbore, and the associated SM69 E Platform and Flowlines. The acquisition is made for a total consideration of US$4.25 million dollars, being the price effective January 1st, 2019.
Following the release of this news, the share price of the company increased by 9.524% in the intraday trade as on 7 January 2019.
On 14 February 2019, Byron executed Purchase and Sale Agreement for the acquisition of 100 percent working interest (WI) in the SM58 Lease Block to a depth of 13,639’ True Vertical Depth (TVD) and 50% WI below 13,639’ TVD, as well as a non-operated 53% WI in the SM58 #E1 producing wellbore and the SM69 E Platform.
As announced on 14 February 2019, the prolific SM58 lease has produced 36 million barrels and 265 billion cubic feet of gas to from 65 producers of 120 wells drilled with all pre-existing wells and platforms fully decommissioned by the previous operators.
The acquisition of SM58 acquisition is providing contiguous acreage on the north flank of the SM73 Field which could help the company in generating additional revenue streams in the near future. Besides receiving additional exploration upside from this acquisition, the company will also get access to production infrastructure as well as a small amount of existing production. While commenting on the acquisition Byron’s CEO, Maynard Smith had told that this acquisition is going to provide benefits to all companies involved.
Byron’s share of oil and gas production (net sales volume) for the December 2018 quarter was 110,056 barrels of oil and 258,048 mmbtu of gas. For the December quarter, the company revenue approximately $US 7.7 million. The company is expecting its SM74 prospect to be drilled in March 2019 quarter from the adjacent existing SM 73 D platform. During the December 2018 quarter, the company issued 1,950,000 fully paid ordinary shares which increased total issued shares to 690,703,513. The company also issued 9,500,000 unlisted options exercisable at A$ 0.40 expiring on 31 December 2021.
Now, let’s have a glance at the company’s stock performance and the return it has posted over the past few months. The stock is trading at a price of $0.345, up by 9.524% during the day’s trade with a market capitalization of ~$219.04 Million as on 7 March 2019. The counter opened the day at $0.320 and reached the day’s high of $0.345 and touched a day’s low of $0.310 with a daily volume of ~529,327. The stock has provided a year till date return of 50.00% & also posted returns of 16.67%, 43.18% & 16.67% over the past six months, three & one-months period respectively. It had a 52-week high price of $0.455 and touched 52 weeks low of $0.195, with an average volume of ~412,184.
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