By OGJ editors
HOUSTON, Jan. 7 – Energen Resources Corp., Birmingham, Ala., has purchased 3-year leases on 17,000 net acres in the Bone Spring and Avalon shale trends in the Permian basin from Texas state agencies for $15.3 million.
The company hasn’t formulated drilling plans on the new leases, but it estimates that its overall acreage position will support 150 Third Bone Spring and 250 Avalon shale drilling locations. The new leases, in Reeves, Ward, Loving, and Winkler counties, potentially have 50 Bone Spring and 50 Avalon shale locations on 320 acre spacing.
A typical Third Bone Spring sand horizontal well has 400,000-500,000 bbl of oil equivalent estimated ultimate recovery at 10,500-11,500 ft true vertical depth at roughly $7.5 million/well, Energen said.
Energen has drilled eight Bone Spring wells in Ward and Winkler counties and participated in another 23 wells. It revealed plans in December 2010 to drill another 13 Bone Spring net wells in 2011 and at least one Avalon shale well.