Linc Energy acquires $236 million in Gulf Coast fields
A US subsidiary of Linc Energy Ltd., Brisbane, has acquired 14 producing oil fields along the Texas and Louisiana Gulf Coast and inland waters from ERG Resources Inc. for $236 million.
By OGJ editors
HOUSTON, June 6 – A US subsidiary of Linc Energy Ltd., Brisbane, has acquired 14 producing oil fields along the Texas and Louisiana Gulf Coast and inland waters from ERG Resources Inc. for $236 million.
The acquisition, consisting of 410 wells on 13,400 acres in 156 leases, secures immediate oil production of 3,300 b/d and a large, longer-term carbon dioxide enhanced oil recovery opportunity, said Linc Gulf Coast Petroleum Inc. The company hopes to nearly double output in 12-18 months.
All of the fields are either salt domes or faulted four-way closures related to deep-seated salt movement. Independent reports commissioned by Linc Energy indicate that the fields have the potential to increase recoverable oil by as much as 24 million bbl by production optimization and further drilling.
Cumulative production for the 14 fields is estimated to be more than 700 million bbl of oil to date with a regional recovery factor of 40%. ERG Resources operates all 14 fields and has 100% of the working interest in the majority.
Linc said a large factor regarding the acquisition is that ERG Resources has to date only advanced major development into one area, the Barbers Hill salt dome, achieving excellent results. The asset package has six more salt domes that Linc Energy can assess to drill and expand with techniques similar to those ERG Resources used at Barbers Hill.
The majority of the value at this stage is attributed to five fields, Barbers Hill, High Island, Port Neches, Atkinson Island, and Cedar Point. Linc Energy anticipates further value being attributed to the other Texas assets once further evaluation is completed.
Portions of Leeville field and Black Bayou field are part of the ERG Resources assets in Louisiana. The majority of the immediate opportunity in Louisiana is in the 100% owned and operated Black Bayou field. Linc Energy plans to aggressively drill Black Bayou in the coming 12-24 months to build production.