Energen Resources, the oil and gas exploration and production subsidiary of Energen Corporation, has entered into an agreement to buy properties in the Permian Basin’s Wolfberry play in the US for $65.8m.
The company will acquire these properties from a private seller and the transaction will add about 3,200 net acres in Midland County, Texas, to the company’s Wolfberry position.
The properties being acquired include 29 producing wells, an estimated 50 undeveloped locations, and proved and probable reserves of about 8.5 million barrels of oil equivalent.
The transaction is expected to close by the end of February but Energen said it does not plan to start developing the properties before 2013.
The estimated cost to develop the properties is $115m.
Meanwhile, Energen Corp is cutting about $45m from Energen Resources’ planned capital investment in the San Juan Basin in 2012, where most of its natural gas is produced, owing to the current outlook for low natural gas prices.
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By GlobalDataThe company intends to have completed drilling its highest return wells in this basin by mid-2012 and will cease all drilling activities there after 30 June 2012.
Energen Resources’ revised capital investment plans for this year reflect about $890m for drilling and development, with $855m targeting the Permian Basin.
It will invest about $415m in its Wolfberry play.
