American Energy–Permian Basin LLC (AEPB), an affiliate of Oklahoma City-based American Energy Partners LP (AEP), has completed or entered into definitive agreements with multiple parties to acquire acreage in the Wolfcamp shale of the central Midland basin, primarily in Reagan County, Tex., for $726 million.
The acreage encompasses 27,000 net acres of leasehold and 1,400 boe/d in net production. The deals are expected to close by yearend. The company previously agreed to acquire 63,000 net acres mostly in Reagan and Irion counties from affiliates of Enduring Resources LLC for $2.5 billion (OGJ Online, June 9, 2014).
AEPB now holds 90,000 net acres in the Wolfcamp, which it believes equates to 245,000 net effective acres. On this acreage, AEPB estimates it will be able to drill 2,700 gross (2,300 net) horizontal drilling locations in the Wolfcamp A, B, and C intervals, of which 90% are in Reagan County.
AEPB believes there are additional potential development opportunities in the lower Spraberry, Cline, and Atoka intervals.
Across its leasehold, the company uses multiple type curves. For the company’s core Wolfcamp A and B wells, AEPB expects that its wells will recover 527,000 boe/well on a two-stream basis and 579,000 boe/well on a three-stream basis. A well with this estimated ultimate recovery is expected to have a two-stream 30-day average IP rate of 647 boe/d.
Following closing of the transactions, AEPB will have proved reserves of 158 million boe. The company is targeting to produce an average of 33,000-38,000 boe/d during 2015, of which 70-75% is expected to be oil.
AEPB is operating five horizontal drilling rigs and anticipates increasing its operated horizontal rig count to 12 rigs by yearend 2015.
