Energy Hunter Resources Inc. has cut a deal to nearly double the size of its position in the Permian Basin’s San Andres oil play by agreeing to acquire 8,817 gross acres in Cochran County, TX, from Lubbock Energy Partners LLC.
Energy Hunter, which took over operation of the properties last month, said it would pay $2,083/acre. The deal is expected to close in August and have an effective date of Jan. 1, 2018. The company said 100% of the acreage is held by production from vertical wells.
The transaction is expected to be funded with cash and preferred stock. Assets included in the deal are 82 producing wells, 87 shut-in wells, 32 salt water injection wells and associated equipment.
“Current reservoir modeling indicates that there are more than 45 potential horizontal well locations based on the amount of acreage acquired in this acquisition, which provides for a minimum of four laterals for every 640-acre spacing unit,” said Energy Hunter CEO Gary C. Evans. The company also noted that there’s “numerous vertical recompletion opportunities.”
The acquisition boosts Energy Hunter’s horizontal drilling locations to 75 in the San Andres, where its position now consists of nearly 20,000 gross acres in Cochran County. It would also own and operate more than 300 vertical wells in the play once the deal closes.
Energy Hunter has put together a patchwork of assets in the San Andres and Eagle Ford Shale in Karnes County, TX, since it was founded in 2016.
The company was formed by Evans shortly after he was ousted as CEO of Magnum Hunter Resources Corp., which eventually filed for bankruptcy and rebranded under new leadership as the Appalachian Basin-focused Blue Ridge Mountain Resources Inc.