Permian Oil and Gas

Comstock Resources Buys Permian Basin Properties

Comstock Resources (CRK) has entered the Permian Basin through the acquisition of 68,000 gross acres in Reeves County, Texas.  The acreage is prospective for Bone Spring formation and the Wolfcamp Shale, and is located in the Delaware Basin. 

Comstock Resources will pay $332.7 million to Eagle Oil & Gas Co. and various other parties.  The acquired properties are mostly undeveloped, but have proved reserves of 23.2 million barrels of oil equivalent (BOE) and daily production of 1,400 BOE per day.

Comstock Resources estimates that the company has 900 vertical drilling locations into the Wolfbone and resource potential of 178 million BOE.

Comstock Resources said that the acreage has twenty nine producing wells and five wells that are being completed.  The deal is expected to close in December 2011 and will be funded through the company’s credit facility.

Petrohawk Energy Advances Permian Basin Development During The Second Quarter Of 2011

Petrohawk Energy (HK) reported on the company’s activity in the Permian Basin during the second quarter of 2011.

Petrohawk Energy is operating four rigs in the Permian Basin, with a concentration in the Delaware Basin.  The company drilled a vertical well into the Wolfcamp formation in Culberson County, Texas.   The well tested at a production rate of one million cubic feet of 1250 BTU natural gas per day.

Petrohawk Energy also reached total depth on a horizontal well into the Bone Springs formation in Reeves County, Texas.  This is the first horizontal well into the Bone Springs and the company plans to complete the well in August 2011.

Petrohawk Energy Permian Basin Summary

• 325,000 net acres – 70% in Delaware basin, 30% in Midland Basin.
• Average leasing cost of $1,400 per acre.
• Targeting the Bone Springs, Avalon Shale and Lower Wolfcamp formations.
• 2011 capital budget of $75 million – 15 gross operated wells.
• Three operated rigs in 2011.

Energen Discloses Avalon Shale Activity

Energen (EGN) updated the investment community on its development of the Avalon Shale on its acreage in the Permian Basin.  This formation is present in the Delaware Basin at depths ranging from 8,500 to 9,000 feet.

Energen (EGN) plans horizontal development of the Avalon Shale and estimates that wells here will have a gross estimated ultimate recovery (EUR) of 300,000 to 350,000 barrels of oil equivalent (BOE) and cost $5.5 million to drill and complete. The company plans to drill seven net wells in 2012 and six net wells in 2013.

Energen said that a step out Avalon Shale well in Winkler County produced approximately 100 to 110 barrels of oil and 400,000 to 600,000 cubic feet of natural gas per day during the first 45 days of production.  The company hopes to correct completion issues and increase production top make the well more economical. Energen is currently working on two other Avalon Shale wells in Reeves and Loving Counties.