Lario Oil & Gas Co. entered multiple agreements to purchase more than 10,000 net acres, primarily in Midland and Martin counties, Texas, for about $345 million.

The 90-year-old Denver-based company and its affiliate Lario Permian LLC said Jan. 19 they purchased assets that include hundreds of drilling locations targeting the Spraberry and Wolfcamp. The sellers were not disclosed.

Net production from the assets is about 1,850 barrels of oil equivalent per day (boe/d). Lario has one rig running in the area and plans to ramp up drilling over the next couple of years.

Mike O’Shaughnessy, Lario’s CEO, told Hart Energy a significant portion of the purchase was contiguous to its existing Midland Basin position.

The aggregated purchases represent more than 39,000 effective acres, O’Shaughnessy said. The company is not disclosing its holdings while “still accumulating” acreage, he said.

Lario has made continued progress in expanding its footprint in the basin.

“We are excited to ramp up our drilling and execute on our extensive inventory,” he said. “Together with our financial partners, we plan to continue to pursue growth opportunities in and around our position in these core counties as we believe that the Northern Midland Basin represents the core of the best oil resource play in North America.”

Lario Oil Gas Company, oil, condensate, production, 2016, Texas Railroad Commission, chart

In June, Lario reported completing a horizontal Wolfcamp A-Spraberry Trend well. The company reported a 24-hour IP rate of 1,690 boe/d (84% oil) with a 30-day average of 1,488 boe/d.

Texas Railroad Commission records show Lario produced oil from several counties in 2016, including Martin, Midland, Andrews and Ward counties, Texas. Oil volumes averaged about 1,600 barrels per day through the first 10 months of 2016, most of it from Midland.

Closings of the transactions are subject to due diligence periods.

Lario is a private, family-owned company founded in 1927.

Darren Barbee can be reached at dbarbee@hartenergy.com.

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