Emerald Oil to acquire Delaware basin assets
Emerald Oil agreed to acquire Delaware basin acreage in the New Mexico counties of Lea and Eddy from undisclosed sellers for $75.2 million, and the acquisition was expected to close by May 31.
The agreement for 10,746 net acres involves multi-stacked, oil-weighted pay zones that are prospective for the Avalon shale, Bone Spring sand, and Wolfcamp shale.
Emerald identified 400 potential drilling locations with additional development potential through downspacing and delineating other horizontal zones. The company said the assets can deliver returns above the cost of capital at existing commodity prices.
Carrizo acquires acres in Delaware basin
Carrizo Oil & Gas Inc. of Houston announced a farm-out agreement with a larger operator in the Delaware basin and plans to begin an operated drilling program later this year.
The agreement provides Carrizo with the right to earn 2,800 net acres in eastern Culberson County, Tex., which would bring Carrizo's acreage position in the play to more than 20,000 net acres.
Carrizo allocated $30 million to its 2015 drilling and completion capital expenditure plan to finance the Delaware basin activity, increasing the overall budget to a range of $470-$490 million.
The new acreage offsets Carrizo's existing position in eastern Culberson County, allowing Carrizo to build a contiguous nine-section unit where it has the potential to drill 30 long laterals in the Upper Wolfcamp.
Carrizo plans to bring a rig into the Delaware basin during the third quarter and to drill three horizontal wells this year although it does not expect material production from them during 2015.
Plans call for Carrizo to operate the wells, and for Carrizo to have an average working interest of at least 80%. As part of the acreage acquisition cost, Carrizo will carry its partner on these wells.
Energen encouraged by Spraberry well results
Energen Corp. of Birmingham, Ala., reported what it called encouraging early results from its first two Lower Spraberry wells, which are in Martin County, Tex.
The company said 54-day performances of the Campbell #501H and the Wilbanks SN 16-15 #501H indicated high estimated ultimate recovery rates, and Energen executives anticipate high rates of return.
Energen had 1.1 billion boe proved, probable, and possible reserves as of Dec. 31, 2014, and another 2.2 billion boe contingent resources.
The independent said it has identified 676 drilling locations in the Lower Spraberry, giving the company a drilling inventory of 2,803 locations in its Midland basin holdings.
Energen operates primarily in the Permian basin.
PAA to expand Delaware basin crude oil pipelines
Plains All American Pipeline LP (PAA) plans to build two Delaware basin crude oil pipelines and related gathering systems, to expand its existing Blacktip pump station, and to build a 20-in. loop line from Blacktip station to Wink, Tex.
These projects in West Texas and New Mexico support PAA's previously announced 24-in. Basin Pipeline loop from Wink to Midland, Tex., and a 12-in. pipeline from Monahans, Tex., to Crane, Tex.
Plans call for the 32-mile, 12-in. OD Avalon Extension to extend the Avalon pipeline, which extends from the PAA Avalon station in northwest Loving County to its Blacktip station in southeast Loving County, Tex., into Culberson County, Tex., transporting as much as 100,000 b/d.
PAA expects to bring the line and two truck unloading terminals at Orla, Tex., and US Highway 285 into service in phases beginning in July 2015, with total system completion, including the associated gathering system, scheduled for September.
The 60-mile, 16-in. OD State Line pipeline will connect Culberson County to Wink, extending along the Texas-New Mexico state border. State Line will connect Delaware basin production in southern Eddy and Lea Counties, NM, and northern Loving, Reeves, and Culberson counties, Tex., to PAA's existing Permian basin assets, moving as much as 150,000 b/d of batched crude and condensate. PAA expects to bring it into service in phases beginning early-2016 and ending mid-2016, with completion of the associated gathering system anticipated by early-2016.