Doral Energy has entered into a letter of intent to acquire 6,800 acres of operated producing oil and gas assets within the Permian Basin for a total purchase price of $1.8m.
The acquisition consists of 15 leases currently producing approximately 54bopd (8/8ths) with working interests ranging from 37.9% to 100% with associated net revenues ranging from 32.3% to 87.5%.
Current production is from the Permian Age, San Andres Formation, which produces at a depth of approximately 4,100ft. This acreage sits adjacent to other San Andres production and offers Doral the ability to explore the possibility of both down-spacing, to exploit un-drained acreage, as well as to stimulate current producers in order to potentially increase production, the company said.
The company expects to enter into a definitive purchase sale agreement on or before June 4, 2010 with an expected closing date of June 30, 2010. Doral intends to utilize a portion of its cash surplus from the closing of its Hanson Energy divestiture to fund this transaction.