American Oil and Gas Reporter - October 2024 - 71

SpecialReport: Panhandle-Hugoton Activity
Higher mineral valuations from growing
interests also are allowing the company
to divest of noncore holdings as part of a
strategy to maintain a reinvestment rate
of less than 50% of operating cash flow
and maximize distributions to unitholders,
explains Ward, who has guided the company
since its 2017 founding and was a
co-founder of Chesapeake Energy.
Earlier in the year, the company divested
of 13,000 acres prospective of the
Cherokee Shale, where Mach still holds
40,000 proven acres on an overall position
of 100,000 acres.
" We only sold a small portion so we
can watch wells that are being drilled
and determine if they can then compete
with our other locations, " Ward reveals.
" The fact is that we have a large amount
of locations to drill, and we need to increase
operating cash flow in order to
get to those locations. "
Chiefly an acquisitions company, Mach
also is on the lookout for potential opportunities
outside the region after integrating
17 Anadarko Basin additions, the
latest 62,000 net acres and production
from Paloma Partners IV with core assets
in Oklahoma's Canadian and Grady counties
and other properties in McClain,
Caddo, Custer, Dewey, Blaine and Kingfisher
counties.
The company uses its drilling program
to stabilize production declines and reports
output of 89,300 barrels of oil
equivalent a day, which is 23% oil, 24%
NGLs and 53% gas, Ward reports.
Mach continues to realize efficiency
gains. Lease operating expense guidance
is down 3%. Per-well costs in deeper condensate
locations are $7.6 million, compared
with initial estimates of $8.6 million. Cycle
time is down to 10.1 days on Oswego
wells and average lateral lengths are up to
6,000 feet from 5,400 feet, he says.
The company is running two rigs, the
first in Kingfisher County, where Mach
has successfully targeted the Oswego
more than 200 times, and the other in the
condensate window in Canadian County.
Acquisition Opportunities
Farther west in the Texas Panhandle,
production companies are acquiring assets
being divested by larger companies and
purchasing other properties from smaller
companies looking to exit the business.
With 1,500 wells producing 55 million
cubic feet of gas a day across 440,000
With 1,500 wells producing
55 million cubic feet of gas a
day across 440,000 acres,
Pantera Energy Co. is focused
on shallow gas reserves in
the Panhandle-Hugoton complex
as well as secondary
recovery projects.
OCTOBER 2024 71
acres, Pantera Energy Co. continues to
take advantage of the ongoing shift, says
President Jason Herrick.
" We still see companies release acreage
outside their core portfolio and release
opportunities back out to folks that are a
little smaller like us, " remarks Herrick,
chairman of the Texas Alliance of Energy
Producers. " We see opportunities out
here and consider ourselves one of the
top players in the region. "
He says the development potential of
unexploited uphole zones is plentiful on
many of the company's producing wells,
and properties often include some drilling
opportunities.
Although open to acquisitions in the
Anadarko after unconventionally developing
a now divested Mississippian project
in Central Oklahoma, the company counts
the Panhandle-Hugoton complex and its
shallow gas reserves as key to its longterm
success.
His father, Scott Herrick, founded Pantera
in 1982. The company's first well,
the Frances No. 1 drilled in 1985, is still
producing in Beaver County, Ok.
After graduating from Texas A&M
University and doing consulting work,
Herrick joined his father's company in
2001. With backing from longtime supporters,
the company accelerated acquisitions.
Early additions included West
Panhandle Field assets from Parker &
Parsley, followed by acquisitions from
divestitures by Devon Energy and BP.
In 2019, the company acquired assets
from Merit Energy that extended operations
into Southwest Kansas. The purchase
included a waterflood project,
and Pantera has implemented three other
waterfloods since then. A Roberts County,
Tx., property includes some stacked
sandstones at greater depths that may
be a solid waterflood opportunity as
well, Herrick says.
" We are actively looking for more
secondary recovery opportunities and
there are more opportunities to do them, "
he comments.
Despite challenges to secure services
and navigating the intricacies of working
with 5,000 mineral owners, the company
is focusing on development work after
recently drilling a well in Kansas. Despite
the region's maturity, there are ample
opportunities that can be identified the
old-fashioned way: poring over well
records, Herrick insists.
Most legacy production comes from
the brown dolomite, called the Chase in
Kansas, a thick rock at a shallow depth.
Uphole recompletions can include acidizing
and some fracturing to shut off older
zones that can include watered-out layers
on wells initially drilled in the 1970s and
1980s, he explains.
High-Btu Content Gas
Other Texas Panhandle operators are
benefitting from high-Btu gas produced
from many of the region's shallow wells.
Questa Energy Corp. of Amarillo, Tx.,
is currently averaging $5/Mcf from rich
American Oil and Gas Reporter - October 2024

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