Earthstone Energy Inc. agreed to acquire operated Midland basin assets from Tracker Resource Development III LLC and an affiliate, and from affiliates of Sequel Energy Group LLC, which hold wellbore interests in certain producing wells operated by Tracker.
With the deal, Earthstone acquires some 20,300 net acres (100% held by production, 100% operated) in Irion County, Tex., with no drilling commitments required on the acreage. Current net production is 7,800 boe/d (21% oil, 59% liquids) from 71 wells (30 horizontal, 41 vertical).
Earthstone said it has identified an inventory of 49 horizontal Wolfcamp locations.
Second-half 2021 production increase of 5,800-6,000 boe/d (19% oil, 59% liquids) is expected prior to adjustments for date of closing.
Tracker is backed by 1901 Partners Management LP and EnCap Investments LP, with each holding a 49% ownership interest and Tracker management holding the remainder.
The deal advances the company’s consolidation strategy following the January close of the $185.9-million acquisition of Warburg Pincus-backed Independence Resources Management LLC, said Robert Anderson, Earthstone president and chief executive officer (OGJ Online, Dec. 18, 2020).
“We paid an attractive price for this producing asset, and while the inventory may not fit into our capital plans this year, the 49 drilling locations represent low-risk and repeatable upside value not included in our purchase price valuation,” he continued.
Closing is expected early in this year’s third quarter.
