Independent oil and natural gas company Concho Resources Inc said it will acquire interests in certain producing and non-producing assets in the Permian Basin for $225 million in cash, from multiple private sellers .
Concho, whose operations are focused in the Permian Basin of Southeast New Mexico and West Texas, said its final ownership level in these acquired assets in the Wolfberry trend will be between 20 percent and 100 percent. We expect to commence an aggressive drilling program on these assets in 2010 that should result in significant production growth over the next several years, Chief Executive Tim Leach said in a statement. The Midland, Texas-based Concho said it identified over 300 Wolfberry drilling locations with proved reserves of about 16 million barrels of oil equivalent (MMBoe) and 22 MMBoe of unproven reserves.
Concho expects 2010 estimated production of 0.7 MMBoe to 0.8 MMBoe, based on assumed capital spending of about $110 million.
The company also said it will update its 2010 forecast when its final ownership is determined after the scheduled close of the transaction in December.
Shares of the company closed at $40.64 Friday on the New York Stock Exchange.
(Reporting by Thyagaraju Adinarayan in Bangalore; Editing by Kavita Chandran)