U.S. Energy Development has acquired a 25% stake in the Mascot Project, a stacked pay asset located in the core Midland Basin, US, in a deal worth $225m in cash and other consideration.
The company expects additional capital expenditure of $130m over the next two years to fully develop the project. This would bring the transaction’s total value to more than $300m.
Majority-owned by Midland Petro D.C. Partners (MPDC), the project is operated by Permian Deep Rock Oil Company, an affiliate of MPDC.
U.S. Energy CEO Jordan Jayson said: “Midland Petro D.C. Partners have spent five years assembling a world-class project in Midland County, and we are excited to have the opportunity to be a part of it.
“Our investment in the Mascot Project deepens our ties in the Permian Basin and highlights our continued strategy to acquire high-quality assets with proven operators in the basin.”
Located in Midland County, Texas, the Mascot Project comprises several producing properties, associated midstream assets and upwards of 50 undeveloped locations.
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In late 2022, U.S. Energy said it plans to allocate up to two-thirds of its operating budget, or $200–300m yearly, for Permian Basin projects in the next two to three years.
The company expects to invest an additional $400m–600m in the assets located in the Permian, Powder River, Midland and Haynesville Basins by 2025.
In a press statement, the company said: “U.S. Energy continues to pursue strategic growth through partnerships with both operated and non-operated drilling projects across these basins.”