A Houston oil and gas company will acquire nearly 21,000 acres in West Texas’ Permian Basin for $950 million.
Earthstone Energy, Inc. announced the purchase of 20,800 net acres from Corpus Christi-based Sabalo Holdings and its subsidiaries. The new acreage will grow Earthstone’s Midland Basin acreage by 69 percent and double the company’s production, according to a news release.
The purchase includes production of 11,200 barrels of oil equivalent a day of which 83 percent is oil and 488 horizontal drilling locations, and will be made with $650 million in cash and $300 million in stock.
Earthstone will have 50,800 net acres in the Midland Basin after the deal closes, which is expected by the first quarter of 2019.
Sabalo is a portfolio company of Houston-based EnCap Investments, an oil and gas investment fund that made an initial investment in the company in 2014.
U.S. oil and gas mergers hit $32 billion in the third quarter, 74.9 percent higher than the $18.3 billion a quarter average measured going back to 2009, according to Austin-based DrillingInfo.
— Read on www.mrt.com/business/article/Houston-company-makes-950-million-buy-in-Permian-13317325.php