Rosehill Resources is set to increase its asset holding in the Delaware Basin, US, having signed an agreement to acquire up to 9,100 net undeveloped acres and certain producing oil and gas properties.
The proposed acquisition of the assets, which are based in the Southern Delaware Basin, includes initial identified 4,565 net acres containing producing properties with production of 40boepd for a purchase price of $77.6m.
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The acquisition of the remaining 4,535 net acres in north-western Pecos County is based on the discretion of the company.
Rosehill Resources president and CEO JA (Alan) Townsend said: “We believe this acquisition demonstrates our continued commitment to grow our strong acreage position in the rapidly evolving Delaware Basin.
“We believe this acquisition is accretive to Rosehill and the full cycle economics will compete favourably with other parts of the Delaware Basin.”
The transaction is expected to enhance the company’s horizontal drilling potential by more than 325 gross locations with opportunities in multiple Wolfcamp A, Wolfcamp B and Bone Spring benches.
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By GlobalDataFurthermore, the acquisition will allow the company to have an average working interest of 86%.
Meanwhile, the contiguous acreage position enables 7,500ft-10,000ft laterals, which the company can leverage to improve well economics.
Townsend further added: “This deal provides meaningful growth to our portfolio by more than doubling our acreage and drilling locations.
“We are very encouraged by offset operator results and our geological assessment indicates an anomalously thick Wolfcamp A/B interval with reservoir properties analogous to the Reeves County Core.”
The company expects the transaction to close in the fourth quarter of this year.
