Anytime an energy company can get its hands on acreage in the Permian Basin, that’s a big move. It’s what Franklin Mountain Energy, LLC based in El Paso, Texas managed to do this week when it acquired 8,321 acres in Lea and Eddy Counties, New Mexico.
Two separate deals were involved,. The first involved 4,041 acres in the Bureau of Land Management New Mexico Oil and Gas Lease Sale on Sept. 6. Weeks later, on Sept. 25, Franklin entered into an agreement with OneEnergy Partners Operating LLC to acquire its existing operations and leasehold totaling nearly 4,280 acres in Lea and Eddy counties.
“We are very excited about these acquisitions and the start of Franklin Mountain’s footprint in the Delaware Basin,” said Paul Foster, chairman of the company. “The combined acreage from these two acquisitions has made Franklin Mountain Energy the largest private contiguous acreage holder across two of Lea County’s geologically-rich townships with a net revenue interest of 87.5% on over half of our operated acreage.”
Foster said with the mostly undeveloped federal acreage, there are hundreds of potential long lateral drilling locations and high-pressure oil-weighted benches to develop.
The OEP acquisition is expected to close by the end of October. At that time, FME will assume control of all OEP producing assets, which include four wells located in Lea County. FME will have 28 permits approved or in process, representing thirteen proration units across five different geologic targets: 1st Bone Spring, 3rd Bone Spring, Wolfcamp XY, Wolfcamp A and Wolfcamp B.
The BLM acreage acquisition was funded with cash and the OEP acquisition will also be funded with cash. FME plans to establish a more permanent capital structure to fund its ongoing drilling program and provide the necessary working capital.