Earthstone Energy acquires Permian acreage
Texas-focused shale company Earthstone Energy said October 4 it had spent some $73mn to acquire acreage in the Permian basin that produces mostly natural gas.
From two undisclosed sellers, Earthstone said it acquired approximately 10,000 acres in the Midland basin within the broader Permian reservoir. The company estimated the reserves at around 13.3mn barrels of oil equivalent, of which 58% is natural gas.
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"This transaction will be our fourth acquisition this year as we continue to advance our consolidation strategy and enhance our Midland basin footprint with additional scale,” CEO Robert Anderson said. “The acquisition of these low operating cost, high margin, producing assets at an attractive valuation is a nice addition to our production and cash flow base.”
Among its other acquisitions this year was a $126.5mn buy into 20,300 net acres in the Midland basin from Tracker Resources Development III.
The broader Permian basin is the second-largest natural gas producing region in the Lower 48 states, behind the Appalachian shale. The federal government estimates Permian natural gas production will average 18.7bn ft3/d for October. The next-largest gas producer behind the Permian is the Haynesville play, with an expected 13.5bn ft3/d this month.