Epsilon enters second drilling transaction in Permian basin
(WO) – Epsilon is entering into a second drilling focused transaction in the Permian basin. The acquired assets are a 25% working interest in 12,373 gross acres located in Ector County, Texas, on the Central basin platform, operated by a Midland-based private operator.
The position is on an emerging Mississippian play proximal to several other active public and private operators. The company will participate in the drilling and completion of 2 gross wells (0.5 net), both 10,000’ laterals, over the remainder of 2023 (the first well is already drilled, first production from both wells is estimated for the fourth quarter of 2023).
Epsilon signed definitive agreements to acquire a 25% working interest in a 1,297-acre unit and a 25% working interest in a 11,076-acre position, both in the same play alongside the same operator. Drilling activity is expected to commence at the 11,076 acreage position in 2024.
Initial plans call for an additional 2-4 gross wells (0.5-1 net) in 2024 with plans expected to be finalized later this year. At an initial assumption of 2 wells per section spacing, this adds 20 gross (5 net) potential development locations to the Company’s inventory.
The 1,297-acre unit interest has already closed and the second 11,076-acre position interest is planned to close within 30 days.
Jason Stabell, Epsilon’s Chief Executive Officer, commented, “We are excited to announce our second new development-focused transaction in the Permian Basin. These investments add liquids to our production mix and the potential for a significant future investment runway in the Ector County project with a well-aligned and basin focused operator.
The transactions allow us to invest sheet andle portion of our liquidity at attractive rates of return, while preserving our strong balance sheet, and maintaining capital allocation flexibility for additional deals and continued shareholder returns.”