W and T Offshore (WTI) entered the Permian Basin through an acquisition announced in April 2011. The company purchased 21,500 net acres for $377 million, for an average price of $17,000 per acre.
The new acreage is located in Gaines, Dawson, Andrews and Martin counties in Texas, and is prospective for various formations including the Upper and Lower Spraberry, Dean, Wolfcamp, Strawn and Atoka.
W and T Offshore said that the acreage held estimated proved reserves of approximately 27 million barrel of oil equivalent (BOE), with oil and natural gas liquids making up 91% of these reserves. The properties were producing 2,800 BOE per day at the time of purchase.
W and T Offshore plans to operate three rigs in 2011 on its properties in the Permian basin, and expects to spend from $35 million to $40 million in capital here during the year. The company expects to drill seven exploratory wells and between 15 and 20 developmental wells in 2011.