IRVING, Texas, March 27, 2018 /PRNewswire/ — Energy Hunter Resources, Inc., an exploration and production company headquartered in Irving, Texas (www.energyhunter.energy), today announced that it has entered into a definitive agreements with Lubbock Energy Partners, LLC to acquire 8,817 gross acres in the San Andres oil play of the Permian Basin. Funding of the acquisition will be through a combination of cash and restricted convertible preferred stock. The final transaction is anticipated to close in August 2018 in order to meet certain requirements of the Seller and has an effective date of January 1, 2018. Energy Hunter took over physical operations of these properties last week.
- Approximately 8,817 gross acres located in Cochran County, Texas
- Low acquisition cost of $2,083 per acre
- 100% of the acreage block is held by existing production (vertical wells)
- 45 identified horizontal drilling locations
- Numerous vertical recompletion opportunities
- Approximately 201 existing wells – 82 producing wells, 32 salt water injection wells, 87
- shut-in wells
- 60% WI 45% NRI (EHR Ownership)
- Significant existing infrastructure, power and electrical infrastructure, salt water disposal wells, injection wells and surface pumps, gathering lines, central tank batteries, pumping units, etc.
Gary C. Evans, Chairman and Chief Executive Officer of Energy Hunter Resources said, “The low-cost acquisition announced today effectively doubles the size of our existing footprint in the San Andres, one of the most economic oil plays in the continental United States. Similar to our previous San Andres acquisition closed in December 2017, we successfully negotiated this transaction to include more than 200 existing wells. 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.”
Energy Hunter Resources and its partner will own and operate substantial existing infrastructure including oil and natural gas gathering lines, salt water disposal wells (“SWD”), SWD gathering lines and injection pumps, power stations and electricity lines, all of which will reduce up front capital costs and provide meaningful savings and efficiencies from field operations.
Evans concluded, “Pursuant to the closing of this transaction Energy Hunter Resources will have approximately 75 horizontal drilling locations, alongside existing vertical wells (more than 300) which holds this acreage position with current production. This multi-year drilling program that consists of nearly 20,000 gross acres is proving to be one of the most prolific economic oil regions in the country largely due to extremely low costs. In addition, the contiguous nature of the acreage position will enable Energy Hunter Resources to achieve operational efficiencies that will lower overall cost and further increase the anticipated internal rates of return for our shareholders.”
About Energy Hunter Resources, Inc.
Energy Hunter Resources, Inc. is an independent oil company headquartered in Irving, Texas with a mission to own and operate properties within some of the most prolific resource plays in the United States. Focusing on the Eagle Ford Shale and Permian Basin regions, our aim is to create substantial shareholder value through a balanced program of acquisitions and low-risk development and exploitation opportunities utilizing horizontal drilling and fracture stimulation technology.