Alabama based Energen Corporation says it has closed and signed purchase and sale agreements on more than half a billion dollars in holdings in West Texas and northwestern New Mexico and now is a pure Permian Basin developer.
The company sold some holdings in the Delaware Basin of west Texas and the San Juan Basin in the Four Corners region, resulting in $551.7 million in total gross proceeds.
The majority of the oil production totaled 34% in the San Juan Basin while the Delaware Basin sale included 55,000 acres of lease holdings.
James McManus, Energen’s chairman and chief executive officer said the proceeds were far more than expected. “As a result, our balance sheet is even stronger.”
He said it will mean more flexibility in devoting additional capital investment in the Permian Basin in 2016 and 2017 “including increased drilling and development and acquisitions.”
Energen intends to increase cap-ex spending in the Permian to nearly $450 million to further build up its inventory of drilled but uncompleted wells.
“Up to $130 million will now target the Delaware Basin where we plan to drill 17-19 net DUCs in the second half of 2016. In total, we now expect to end the year with approximately 54-58 net DUCs in the Permian Basin,” said McManus.
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