The project in Colorado was acquired by Modiin in February 2021 for a $ 20 million portion of Modiin, which owns 50% of the project, along with the Private Equity Fund, which specializes in energy investments.
Modiin Energy reported today that it has contracted with a banking corporation to fund a stake in the Colorado Project Development Plan. The banking corporation will provide the project with a loan of $ 20 million to finance Modiin’s share in the development plan.
Modiin and the banking corporation intend to examine the expansion of funding for the development program in the coming years.
The project in Colorado was acquired by Modiin in February 2021 for $ 20 million as part of Modiin, which owns 50% of the project, along with a private equity fund that specializes in investments in energy projects.
The multi-year development plan planned for the project includes in the first phase, drilling of 24 wells, between the years 2022-2024 (8 each year), which will lead to a significant increase in the share of intelligence in production, from about 900 barrels per day in 2022, to about 2,000 barrels per day on average in 2023 And over 3,000 barrels on average per day at the end of 2024, after the completion of the first phase of the development plan. The drilling plan for 2022 is expected to begin in the second quarter, with Modiin and its partners already preparing with the ordering of the equipment and services required to carry out the plan.
At the same time, Modiin reported yesterday a hedge of 2/3 of the expected production from the existing drillings alone, about 215,000 barrels, until September 2023 with a floor price protection of $ 65 from the second half of 2022 to a range of about $ 106.
Modiin ended the first nine months of 2021 with $ 16.7 million in oil production revenues, $ 6.4 million in net profit and $ 6.4 million in free cash flow.
Yaron Zoares, CFO: “The framework agreement to finance the project gives Modiin operational and financial flexibility and the ability to grow with the asset based on the financing and cash flow generated from the asset and also allows Modiin to continue to develop its other assets, particularly renewable energy projects.”