Energen Resources Corp. agreed to acquire proved, undeveloped oil and natural gas liquids assets in the Permian basin's Wolfberry play from a private seller for $65.8 million. The Birmingham, Ala., independent also plans to cut its gas production this year because of low gas prices.
The acquisition, expected to close by Feb. 29, will add 3,200 net acres to its Wolfberry position, said the company, adding that it has no plans to develop the assets before 2013.
Energen Resources previously said 54% of its proved reserves are in the Permian basin. More than half of the company’s yearend proved reserves are liquids (Oil & Gas Journal Online, Jan. 26, 2012).
Regarding its budget, Energen plans to cut $45 million from its planned investment in the San Juan basin where Energen expects to have completed drilling its highest-return gas wells by mid-year. Energen will not drill there after June 30.
The company's 2012 revised budget allocates $890 million for drilling and development with $415 million of that to be invested in the Wolfberry play.