Stacked pay zones

Operations

The Permian Basin is an attractive operating area due to its multiple stacked hydrocarbon-bearing formations that are prospective for horizontal development. The basin is further characterized by a favorable operating environment, high oil and liquids-rich natural gas content, significant in-place  midstream infrastructure, a well-developed network of oilfield service providers, long-lived reserves with consistent geologic attributes and reservoir quality and historically high development success rates. According to the Energy Information Administration of the U.S. Department of Energy, the Permian Basin is the most prolific oil producing area in the United States, accounting for 25% of total U.S. crude oil production during September 2016.

Jagged Peak has ~61,000 net acres, targeting the oil-rich southern portion of the Delaware Basin located on large, contiguous blocks in the adjacent counties of Winkler, Ward, Reeves and Pecos, with significant original oil-in-place within multiple stacked hydrocarbon-bearing formations. We specifically targeted the Southern Delaware Basin due to the abundant amount of oil-in-place, stacked pay potential, low breakeven prices, attractive well economics, favorable operating environment and in-place midstream infrastructure.

Based on the wells we have drilled to date and wells drilled by other operators, we believe the Lower Wolfcamp A, Upper Wolfcamp A, Wolfcamp B and 3rd Bone Spring Sand formations are significantly delineated across our acreage. The top of the Wolfcamp formation ranges from approximately 8,850 feet to 11,420 feet, and the top of the Bone Spring formation ranges from approximately 8,600 feet to 10,900 feet. We also believe that significant additional development opportunities exist on our acreage in the Brushy Canyon, Avalon Shale, 1st Bone Spring Lime, 1st Bone Spring Sand, 2nd Bone Spring Sand, 3rd Bone Spring Lime, Wolfcamp C and Wolfcamp D formations.


A & D and Exploration

Operating Statistics

·       60,000+ net acres

·       98%+ operated

·       1,265 identified drilling locations

·       32.8 MMBOE Proved Reserve

As of September 30, 2016, we have drilled and completed 16 horizontal wells. Based on the wells we have drilled to date and wells drilled by other operators, we believe that significant additional development opportunities exist on our acreage and promise continual growth for years to come. 


Growth Profile

The prolific nature of our long-lateral horizontal drilling locations and continually modified and improved completion designs have allowed us to increase our average net daily production from 345 Boe/d in the first quarter of 2014 (normalized for five days of production) to 6,498 Boe/d in August 2016 while operating an average of one horizontal drilling rig during that period. We began operating our second and third rigs in July of 2016. The chart below shows our historical production over time.

(1)   Q1 2014 production normalized for five days of production. (2)   The increase in production from Q3 2014 to Q4 2014 was partially attributable to the acquisition of three producing wells in September 2014 with average daily production of 74 Boe/d during Q4 2014. (3)   We added our second and third rigs during July 2016. There have been no completions or production attributable to these rigs as of September 30, 2016.

(1)   Q1 2014 production normalized for five days of production.

(2)   The increase in production from Q3 2014 to Q4 2014 was partially attributable to the acquisition of three producing wells in September 2014 with average daily production of 74 Boe/d during Q4 2014.

(3)   We added our second and third rigs during July 2016. There have been no completions or production attributable to these rigs as of September 30, 2016.