Sequitur Energy Resources’ affiliate Sequitur Permian has acquired producing properties in Reagan and Upton Counties, Texas, US, from Callon Petroleum and other undisclosed sellers for $264.6m.
The acquisition includes a total of 11,000 acres with more than 200 estimated future development locations based on 880in well spacing at an average lateral length of 8,300in.
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Average net production of the properties is greater than 5,000boe/d on a three-stream basis during this January with an estimated 19mmboe of PDP reserves, valued at more than 80% of the purchase price at the time of execution of the definitive agreement in April.
With an average work interest of 77%, the acquired assets will be 100% operated by Sequitur.
As part of the acquisition, substantial oil, gas and water infrastructure providing significant synergies will be combined with Sequitur’s existing facilities.
Sequitur will make $61.1m worth of contingency payments until 2021, subject to annual WTI averages.
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By GlobalDataWith the acquisition, Sequitur’s Permian footprint increases to approximately 88,000 acres, with 28,000 of them in Reagan and Upton Counties and nearly 60,000 of the total acres in Irion and Crockett Counties, with a net production capacity of 35,000boe/d.
Sequitur Energy CEO Scott Josey said: “This transaction is an excellent bolt-on acquisition at attractive metrics, which complements our existing Reagan County position and further expands our footprint into Upton County.
“It is consistent with our corporate philosophy of focusing on rate of return, cash flow, and operated contiguous acreage positions with substantial upside and modest drilling commitments.”
With funding from Sequitur’s existing revolving credit facility, the transaction was led by Wells Fargo Bank.
