FormCap Corp (FRMC)

[specbidder]

Energen to acquire additional acreage in Permian Basin

Published Nov 2, 2010
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Energen Corporation

Energen has signed a Purchase and Sale Agreement with a private seller to acquire 10,360 net Wolfberry acres in the southeast portion of the trend for $75 million. This Permian Basin acquisition is largely oil and natural gas liquids (NGL) and offers a sizable drilling inventory.

The property includes six producing wells and two wells awaiting completion. Energen Resources has identified 63 proved undeveloped (PUD) locations and 169 probable locations. Estimated proved reserves total 7.6 million barrels of oil equivalents (MMBOE), or 45.8 billion cubic feet equivalent (Bcfe). Estimated probable reserves total 18.4 MMBOE, or 110.1 Bcfe. Future development costs are estimated to be $430 million (including P&A), bringing Energen Resources’ all-in acquisition cost to $19.42 per BOE.

Oil represents 63 percent of the acquisition's estimated proved and probable reserves; NGLs make up 24 percent; and natural gas comprises the remaining 13 percent.

The company plans to develop these properties over the next six years. Specific plans for this acreage in 2011 will be incorporated into the company’s 2011 capital and operating budgets that will be finalized in early December.

The acquisition is expected to close by the end of the year, with an effective date of December 1, 201

Tags: Energen Corporation