Oil and gas firm Energen Resources has purchased five-year leases for more than 11,000 net acres in the Bone Spring and Avalon shale trends in the Permian basin, US, for $37m.

Based on 320-acre spacing, the company estimates that the acreage, primarily in Reeves County in the US state of Texas, offers the potential for approximately 30 Bone Spring locations and 30 Avalon shale locations.

The typical 3rd Bone Spring well has an estimated ultimate recovery (EUR) of 400-500 thousand barrels of oil equivalents (mboe).

As operator, Energen has drilled and completed 11 Bone Spring wells and currently is drilling four more.

The company said it plans to drill another 11 wells in the 3rd Bone Spring sands by year-end 2011.

The Avalon shale offers a horizontal oil play at a vertical depth of 8,500ft-9,000ft.

The company believes that the EURs could be approximately 300-350mboe, with well costs of some $5.5m.

Energen Resources said it is currently completing its first Avalon shale well.