Empire New Mexico LLC, a subsidiary of Empire Petroleum Corp., Tulsa, has acquired producing oil and gas assets and related gathering assets in Lea County, NM, from ExxonMobil Corp.’s XTO Holdings LLC.
The acquired operated assets are comprised of 700 gross oil, gas, and injector wells and encompass about 40,000 net acres of Permian leasehold. The properties are characterized by high working and net revenue interests, producing some 1,100 net boe/d (67% oil), the company said in a release May 18.
Eunice Monument (EMSU) and Arrowhead Grayburg fields (AGU) lie on the northwestern edge of the Permian basin’s Central Basin Platform in southeastern Lea County, about 15 miles southwest of Hobbs.
Empire believes the assets have current infill drilling and return-to-production well potential.
EMSU field was discovered in March 1929 with most field development occurring in 1934-1937 as the second largest carbonate reservoir in the Texas-New Mexico Permian area. USGS estimates known recoverable efficiency in Eunice field and surrounding satellites near 40% with primary and secondary recovery of an estimated 4.5 billion original oil bbl in place, Empire said. Well development in the EMSU was on 40-acre spacing and the field was produced under primary means until unitization of the field occurred in February 1985 as a secondary waterflood. Productive intervals at Eunice are mostly Queen, San Andres, and Grayburg formations.
In connection with financing of the acquisition, Empire New Mexico entered into a $16.25 million senior secured convertible note with Energy Evolution Master Fund Ltd. at 3.8% per annum interest.
With this acquisition Empire operates in five states (Texas, Louisiana, North Dakota, Montana, New Mexico) with an aggregate of over 100,000 net leasehold acres and 1,800 net boe/d.
