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.
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.”