Diamondback Energy has signed an agreement with an undisclosed company to acquire leasehold interests and related assets in the Southern Delaware Basin for $560m.
The majority of the interests are located along the Pecos River in Reeves and Ward counties, Texas, US.
As part of the deal, the company will acquire 19,180 net surface acres primarily in Reeves and Ward counties and about 1,000 barrels of oil equivalent per day (boe/d) of existing net production.
The acquisition will also include 290 net identified potential horizontal drilling locations across four zones, salt water disposal (SWD) infrastructure and additional assets valued at $10m to $15m.
Diamondback Energy CEO Travis Stice said: "Diamondback's accretive entrance into the Delaware Basin represents another strategic milestone for our company.
“The acreage sits within the most coveted area of the Southern Delaware Basin and has significant multi-zone and long-lateral potential.
“We believe that two of the three de-risked zones across the acreage have comparable estimated ultimate recoveries (EURs) per lateral foot to the Lower Spraberry in the Northern Midland Basin.”
Expected to close in September this year, the transaction will bring Diamondback's total leasehold to about 105,000 net acres.
The company recently completed two Wolfcamp A wells in Spanish Trail, which have produced an average of 1,665boe/d (92% oil) over 14 days.
Diamondback intends to finance the acquisitions through a combination of cash on hand and proceeds from one or more capital markets transactions.
