BRG continues to operate investor-funded programs
as well as actively pursuing development drilling and acquisition
opportunities. Following is a summary of BRG Investor Programs.
INVESTOR PROGRAM HISTORY
1. BRG Programs 1987 through 1997. BRG operated 16 oil and gas Programs during this period, which raised a total of $26.6MM in investor funds. The assets of these Programs were sold in 1998 with the investors receiving total cash distributions of $42.7MM. Cash on cash return for this program saw a low of 116 percent, a high of 301 percent with an average of 161 percent.
2. BRG Programs 1998 through 2003. BRG operated 6 oil and gas Programs during this period, which raised a total of $43.8MM in investor funds. The assets of these Programs were sold in 2005 with the investors receiving total cash distributions of $101.0MM. Cash on cash return for this program saw a low of 196 percent, a high of 417 percent with an average of 231 percent.
3. BRG 2004-I Oil and Gas Program. The 2004-I Program was closed on February 19, 2004 with a total subscription of $14.0MM and has returned a total of $26.6MM, or 190%, to the investors through distributions for the first quarter of 2011. The first 18 wells drilled by the Program were sold in 2005 with the sale proceeds providing a distribution of approximately $16.6MM. The Program currently owns an interest in 10 wells, which are all producing. These 10 wells were all drilled after the sale of the early wells in 2005. The projected total return to the investors should be in excess of 200 percent. This total return combined with the quick payout from the sale of the initial wells provides excellent overall economics for the Program.
4. BRG 2005-I Oil and Gas Program. The 2005-I Program was closed on June 9, 2005 with investor funding of $12.5MM at that time and a second funding of $12.5MM on October 15, 2006 for a total Program size of $25.0MM. The Program has returned a total of $23.4MM, or 94% to the investors through distributions for the first quarter of 2011. The Program participated in the drilling of 38 wells and earned an interest in one additional well that was already on a lease that was drilled by the program. The drilling phase of the Program was negatively impacted by the extreme drilling rig shortages and the dramatic cost spikes that followed. This caused the development of the Program to be delayed and predatory prices to be paid for services in some cases where operations could not be delayed. Toward the end of the development phase, the shortages moderated and costs stabilized at reasonable levels. The Program participated in 8 wells in Leon County, Texas that resulted in very good wells and in 6 wells in Rusk/Nacogdoches Counties, Texas that were disappointing. This is another example of how the diversification provided through the program approach is beneficial to the investor. The remainder of the wells were drilled in Western Oklahoma, with results pretty much as expected. The projected total return to the investors in the Program is around 170% of the original investment based on a gas price of $4.65/mcf held flat over time.
5. BRG 2007-I Oil and Gas Program. The 2007-I Program was closed on July 6, 2007 with total investor funding of $15.0MM. The Program has returned a total of $9.2MM, or 61% to the investors through distributions for the first quarter of 2011. The Program participated in the drilling of 39 wells. Thirty-five wells are producing and four wells were abandoned as dry holes. We are disappointed in the four non-productive wells, but we drilled several very good wells that offset the impact of the unsuccessful wells. All wells are located in our core areas of Western Oklahoma and East Texas. The projected total return to the investors in the Program is around 162% of the original investment based on a gas price of $4.65/mcf held flat over time.
6. BRG 2008-I Oil and Gas Program. The 2008-I Program was closed on April 30, 2008 with total investor funding of $16.0MM. The Program has returned a total of $6.9MM, or 43% to the investors through distributions for the first quarter of 2011. The Program participated in the drilling of 52 wells. Forty eight wells are producing to sales, one well is in the final stages of completion operations and 3 wells will be abandoned. The drilling phase was delayed during late 2008 and early 2009 due to rig shortages caused by the high gas prices in 2008. While this delay will slightly reduce the rate of return, the overall return will be greatly enhanced by waiting for lower drilling costs, which allowed the drilling of more wells. The Program is projected to provide a total return to the investors in excess of 200% of the original investment based on a gas price of $4.65/mcf held flat over time.
7. BRG 2009-I Oil and Gas Program. The 2009-I Program was closed on August 20, 2009 with total investor funding of $18.8MM. The Program has returned a total of $3.0MM, or 16% to the investors through distributions for the first quarter of 2011. The development phase of the Program has been slowed by the delays in the 2008-I program noted above. At this time thirty two wells are producing and another 16 wells are in various stages of drilling or completion. One well was unsuccessful and will be abandoned. We expect that the drilling phase of the Program will be completed near the end of 2011 and that the Program will ultimately participate in around 60 wells. Based on the results of the initial wells, the Program is on target to meet or exceed our economic target of a 200% return to the investor.
8. BRG 2010-I Oil and Gas Program. The 2010-I Program was closed on November 19, 2010 with total investor funding of $17.0MM. At this time 8 wells are producing and another 16 wells are in various stages of drilling or completion operations. We expect that the Program will ultimately participate in around 55 wells.
9. BRG 2011-I Oil and Gas Program. The 2011-I Program was closed on November 23, 2011 with total investor funding of $18.4MM. We are currently assembling prospects for the Program and have started regulatory work on several prospects. We expect that the Program will focus primarily in our core areas of Western Oklahoma and East Texas. We plan to begin drilling the first wells during early December. We anticipate that the Program will participate in the drilling of approximately 50 wells over the next 12 to 18 months.
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