Exploration and production company Energy Hunter Resources has closed the previously announced acquisition of 9,413 net acres located in the San Andres oil play of the Permian Basin in the US.

The acquisition comprises existing wells and lease acreage position, which is held by production (HBP) and located in the Slaughter-Levelland Field of the San Andres formation.

Based on initial reservoir modelling, the acreage is said to contain more than 45 potential horizontal well locations.

The assets were acquired by the company, along with certain institutional investors, from an undisclosed seller in a transaction valued at $20m.

Energy Hunter Resources chairman and CEO Gary Evans said: “The closing of our first San Andres acquisition positions our company in one of the lowest cost and most economic oil plays in the US today.

“The closing of our first San Andres acquisition positions our company in one of the lowest cost and most economic oil plays in the US today.”

“Our current plan is to drill a minimum of six wells per year on this acreage and engage in multiple low-cost recompletion opportunities in order to drive additional production growth.

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“Our management team is continuing to explore additional opportunities for growth both organically and through acquisitions throughout this San Andres play.”

The acquired assets have current gross production of around 72 barrels of oil equivalent per day.

In addition to the 9,413 net acres in Cochran County, Texas, the acquisition comprises around 160 wells, power generation and electrical lines, salt water disposal wells, injection lines, surface pumps, tank batteries and pumping units.

The transaction gives Energy Hunter the exclusive right, which is valid until January next year, to acquire an additional 9,600 net acres of San Andres leases.