Diamondback Energy Inc., Midland, Tex., has entered into a definitive purchase agreement with unrelated third party sellers to acquire 16,773 gross (13,136 net) acres in Midland, Glasscock, Reagan, and Upton counties in Texas for $538 million.
The deal, expected to close in early September, would increase Diamondback’s total position in the Midland basin to more than 85,000 net acres. Of the total acreage to be acquired, 88% is operated.
Net production from the acreage totaled 2,173 boe/d in May from 131 gross (94 net) producing wells. Net proved reserves, based on Diamondback’s internal estimates as of June, totaled 5.2 million boe on a two-stream basis.
Diamondback has identified 396 gross potential horizontal drilling locations and 256 net potential horizontal drilling locations, all in the Wolfcamp B, Lower Spraberry, Clearfork, Middle Spraberry, Wolfcamp A, and Wolfcamp D (Cline) formations.
"We believe this acreage to be some of the best in Diamondback’s inventory, some of which offsets our Gridiron well, which appears to be among the best horizontal wells on a per lateral foot basis in the Midland basin,” said Travis Stice, Diamondback chief executive officer.
Stice added that the company’s test of the Lower Spraberry formation in Upton County appears to confirm a new development horizon. “This marks another first for Diamondback, as we believe this Lower Spraberry horizontal well is the first of its kind in Upton County,” he said.
The company completed 15 horizontal wells in the second quarter, of which 12 were drilled in the Wolfcamp B, two were drilled in the Lower Spraberry, and one was drilled in the Clearfork.
During the first half of the year, 23 Wolfcamp B wells have been completed, 21 of which have sufficient production history for an average peak 24-hr rate of 1,047 boe/d, 90% of which is oil, from an average lateral length of 6,911 ft.