Epsilon Energy Acquires Assets in Permian Basin, Texas
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Epsilon Energy Ltd. reported an investment in Ector County, Texas with material follow-on development opportunities.
Epsilon entered into a second drilling focused transaction in the Permian Basin. The acquired assets are a 25 percent working interest in 12,373 gross acres located in Ector County, Texas on the Central Basin Platform, operated by a Midland-based private operator.
The position is on an emerging Mississippian play proximal to several other active public and private operators. The company will participate in the drilling and completion of two gross wells (0.5 net), both 10,000’ laterals, over the remainder of 2023 (the first well is already drilled, first production from both wells is estimated for the fourth quarter of 2023).
Epsilon signed definitive agreements to acquire a 25 percent working interest in a 1,297 acre unit and a 25 percent working interest in a 11,076 acre position, both in the same play alongside the same operator. Drilling activity is expected to commence on the 11,076 acreage position in 2024. Initial plans call for an additional 2-4 gross wells (0.5-1 net) in 2024 with plans expected to be finalized later this year. At an initial assumption of two wells per section spacing, this adds 20 gross (5 net) potential development locations to the company’s inventory.
The 1,297 acre unit interest has already closed and the second 11,076 acre position interest is planned to close within 30 days.
Recent offset well results from multiple operators have been encouraging.
The total consideration net to Epsilon for the transaction, including 2023 capital expenditures, is approximately $14 million.
“We are excited to announce our second new development-focused transaction in the Permian Basin. These investments add liquids to our production mix and the potential for a significant future investment runway in the Ector County project with a well-aligned and basin focused operator,” said Jason Stabell, Epsilon’s chief executive officer.
Epsilon Energy is a North American on-shore focused independent exploration and production company engaged in the acquisition, development, gathering, and production of oil and gas reserves. Their primary area of operation is the Marcellus basin in Northeast Pennsylvania complemented by additional upstream assets in the Permian and Anadarko basins.
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