Energy Hunter Resources Inc. is acquiring Permian Basin acreage in West Texas to target Lower Spraberry and Wolfcamp formations, adding more weight to its emerging U.S. onshore portfolio, the Dallas-based explorer said Wednesday.
Mineral rights are being acquired in the Midland sub-basin under 320 gross acres in Howard County, where Energy Hunter expects to drill nine wells. The Lower Spraberry and Wolfcamp A would be initial horizontal targets in the offset wells, with potential horizontals later in the Wolfcamp B and Wolfcamp C benches.
No financial details were provided, but a 60-day due diligence period to confirm title was underway by the exploration and production (E&P) company.
"The pending mineral rights acquisition located in the core of the Midland Basin signals our continued commitment toward unlocking value in one of the most economic plays in North America," CEO Gary C. Evans said. Evans formed Energy Hunter shortly after he was ousted as CEO of Magnum Hunter Resources Corp., which emerged from bankruptcy in May under new leadership (see Shale Daily, July 15; May 11).
At the end of last week (Sept. 23), a total of 168 horizontal rigs were running in West Texas, Evans said, "up 211% from a low of 53 drilling rigs operating in April 2016. This continued recovery during a depressed commodity price environment represents the fastest recovery of any U.S. resource play, as an increasing number of E&P operators allocate capital toward regions that can generate superior economic returns."
The Midland purchase complements acreage that Eagle Hunter acquired in the Eagle Ford Shale.
"Acquiring mineral rights located in strategic operating regions such as the Midland Basin complements our disciplined growth strategy as the investment in mineral rights provides an opportunity for positive cash flow without increasing future capital expenditures or suffering any operating cost burdens," the CEO said.