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Resolute Closes Deal to Bolt On Permian Leasehold in West Texas

Denver-based Resolute Energy Corp. has closed a previously announced $160 million purchase of 4,600 net acres within the Permian Basin from CP Exploration (CPX).

The deal, which was announced by Resolute in early March, adds 800 boe/d in output and boosts the explorer's leasehold in Reeves County, TX, within the Delaware sub-basin by 28% to 21,000 net acres. The transaction also includes six drilled but uncompleted (DUC) laterals and one well now being drilled.

The assets include about 2,200 net acres in the core of the southern Delaware sub-basin and 2,400 net undeveloped acres in the Alpine High, a play that has become Apache Corp.’s No. 1 U.S. onshore target.

The primary CPX asset, located near Orla, TX in Reeves County, was a drill-to-earn farm-out with a major independent and included significant infrastructure, two recently completed horizontal wells producing from the Upper Wolfcamp, seven Upper Wolfcamp horizontal wells, and 320 surface acres that provide operational efficiencies for the future development, according to privately held CPX.

The purchase includes 2,187 net acres adjacent to Resolute's existing Orla project, and 2,405 net acres in its Southwest Rim project area. Nearly all (95%) of the acquired acreage would be operated by Resolute.

The new Orla bolt-on includes stakes in two operated 4,500-foot horizontal Wolfcamp wells that currently produce 800 boe/d net. Four of the DUCs have lateral lengths averaging 4,500 feet while two have 7,500-foot laterals. The one well still being drilled is a 10,000-foot lateral. Current estimates indicate the new acreage would support 54 net (112 gross) locations on 80-acre spacing.

Resolute assumed operations on the acquired properties on May 1 and began hydraulic fracturing operations on the first of six DUC wells on May 4.

Resolute said it financed the acquisition in substantial part with proceeds received from a previously announced offering of $125 million of 8.50% senior notes due 2020, which closed on May 12.

A relentless chase to capture and develop more land in the Permian has led Resolute to rethink keeping its legacy Aneth Field holdings in Utah's Paradox Basin. The independent said recently that it is exploring a sale of Aneth while it continues to extend its position in the Delaware sub-basin. A predecessor Resolute company and a partner in 2004 acquired assets in the Greater Aneth Field in southeastern Utah from a Chevron Corp. legacy company. 

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