By OGJ editors
HOUSTON, Sept. 23 -- El Paso Corp. has boosted its lease position to more than 135,000 acres in a Wolfcamp shale play in West Texas by submitting winning bids for 123,100 acres with multiple pay opportunities.
The newly acquired University of Texas leases, in Reagan, Crockett, Upton, and Irion counties, give El Paso “a material position in a new oil shale program with significant resource and production potential,” the company said.
The acreage acquisition, the culmination of an extensive regional study by El Paso’s technical team, is expected to become a new oil-focused core area, the company added. It is El Paso’s second organic shale entry following acquisition of more than 170,000 net acres in the South Texas Eagle Ford shale.
El Paso said the combination of large contiguous blocks and a single royalty owner in West Texas give the company “tremendous operational flexibility.” The company plans to issue an update on its Wolfcamp shale plans in a Nov. 3 conference call.
El Paso said it “remains committed to managing its E&P program for returns and having E&P live within its means. In addition, the company remains committed to generating free cash flow in 2012. To that end, the $180 million cost of the acquired acreage will be funded over time through portfolio rationalization, and future development capital will compete with other programs in the portfolio.”