Rosetta to buy Permian basin assets from Comstock

Rosetta Resources Inc. is entering the Permian basin with plans to buy assets from Comstock Resources for $768 million, subject to customary closing adjustments.

The acquisition covers 53,306 net acres (87,373 gross) in Reeves and Gaines counties in West Texas. The Reeves County assets in the Delaware basin include 40,182 net acres and 74 producing (52 operated) primarily Wolfbone wells, Rosetta said.

Total current net production is 3,300 boe/d, of which more than 73% is oil. A Houston independent, Rosetta estimates 1,300 gross, or nearly 800 net well sites targeting the Wolfbone on 40-acre vertical well spacing.

Rosetta estimates total net risked resources potential of 145 MMboe, of which 67% is oil and 82% liquids. Potential upside also exists from further vertical well down-spacing and potential horizontal drilling, including the Wolfcamp formation, none of which is currently included in the resource estimate.

The Gaines County assets in the Midland basin cover 13,124 net acres and are undelineated. Potential exists for multiple exploratory opportunities. Rosetta’s resource estimate for the Permian basin acquisition excludes potential future resources from the Gaines County acreage.

An increasing number of independents are looking at unconventional possibilities in the Midland basin (OGJ, Feb. 4, 2013, p. 38).

Jim Craddock, Rosetta chairman, chief executive officer, and president, said the oil-targeted acquisition complements the company’s existing Eagle Ford properties in South Texas.

Closing is expected by May 15 with an effective date of Jan. 1.

Comstock, an independent based in Fresco, plans to use the proceeds to trim its debt and finance an increase to its 2013 drilling program in the Eagle Ford.

Consequently, Comstock revised its 2013 capital budget to reflect the West Texas property divestiture. The company expects to spend $410 million on drilling activities and another $12 million on exploratory leasehold for total capital expenditures.

The Eagle Ford shale will account for $312 million. Comstock plans to drill 72 wells (46.9 net) there and is going to increase the number of operated rigs in South Texas from three to six during the second half of the year.

M. Jay Allison, Comstock chief executive officer, said the company is directing resources to accelerate the development of Eagle Ford oil assets.

Contact Paula Dittrick at paulad@ogjonline.com.

Related Articles

Texas: Energy adds Bone Spring/Avalon acreage

01/07/2011 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 Permia...

NETL: Carbon dioxide for EOR provides model for pipeline system

02/03/2011 A private sector model with a state-based regulatory system, instead of one that is federal, will “most likely result in a robust” US c...

Brent tops WTI as benchmark

02/14/2011 As the international benchmark other crudes are priced against, “West Texas Intermediate is dead, long live North Sea Brent,” said anal...

ExxonMobil: Oil to account for most new production in 5 years

03/17/2011 ExxonMobil Corp. expects to add nearly 1.4 million boe/d net to its production by 2016, and oil will account for 80% of that new production, compan...

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected