The lease consists of 1,462 acres in Bowie County, and there are seven wells on this property, of which three are currently producing.
The deal calls for a payment of $3.25m and 2.5 million common shares to Black Sands, and an additional $3m deposited into the Redwater/Maud recompletion/rework escrow account by 30 December 2011.
Paxton said Phase I of the recompletion/rework development plan will result in all seven wells being on-line and producing.
At least six undeveloped locations remain within the property with the potential for a Phase II plan which will explore additional well drilling locations.
Paxton chairman and CEO Charles Volk Jr. said this acquisition follows the company’s business strategy of acquiring properties with proved and probable reserves and then developing the fields by reworking the existing wells and drilling new wells.
