WASHINGTON (dpa-AFX) - Energen Corp. (EGN) announced that its oil and gas exploration and production subsidiary, Energen Resources, has signed a purchase and sale agreement to buy a primarily proved undeveloped Wolfberry package from a private seller for $65.8 million plus standard closing adjustments.
Energen also announced that it is cutting approximately $45 million from Energen Resources' planned capital investment in the San Juan Basin in 2012.
Energen's newest planned acquisition is expected to close by the end of February and will add some 3,200 net acres in Midland County to the company's extensive Wolfberry position in the Permian Basin.
Energen Resources expects to have completed drilling its highest return wells in the San Juan Basin by mid-year and will cease all drilling activities there after June 30, 2012, in light of continued weakness in natural gas prices.
Energen Resources' revised capital investment plans for 2012 reflect approximately $890 million for drilling and development, with $855 million targeting the oil- and liquids-rich Permian Basin. The largest portion of 2012 capital - approximately $415 million -- will be invested in the company's Wolfberry play. Energen Resources' estimated production in 2012 remains 24 MMBOE.
Copyright RTT News/dpa-AFX
