U.K.-based Nostra Terra Oil and Gas Co. Plc said Oct. 22 it acquired Permian Basin assets from Tall City Exploration III LLC, quadrupling Nostra Terra’s footprint in the prolific basin and added potential for horizontal development.

The acquisition is comprised of an operated 100% working interest in the Mesquite Prospect, which covers about 1,384 net acres in West Texas. This represents a 308% increase to Nostra Terra’s total net acreage position in the Permian Basin, according to a company press release.

Nostra Terra estimates the potential to drill an estimated eight horizontal wells on the acquired acreage with additional vertical well potential. The company plans to target an IP of 200 to 300 barrels per day of oil per horizontal well based on analogous regional drilling.

Under the terms of the acquisition, Midland, Texas-based Tall City will keep a 1/8th carried working interest in the first horizontal well drilled by Nostra Terra at the Mesquite Prospect. In addition, Nostra Terra will pay Tall City US$150,000 cash for the acquisition.

In September, Tall City reemerged with a $500 million financing from New York-based private-equity firm Warburg Pincus earmarked for deployment in the same acquire-and-exploit strategy as the team’s prior successful ventures in the Permian Basin.

Nostra Terra is an AIM-listed E&P with assets in East Texas and in the Permian Basin of West Texas as well as operations in the Western Desert of Egypt. The company is headquartered in London with a U.S. office in Dallas.

Matt Lofgran, CEO of Nostra Terra, said the company first identified the Mesquite Prospect as an acquisition target in the Permian Basin in early 2017.

“For a company of our size, this is a huge opportunity, which we are now well positioned to take advantage of,” Lofgran said in a statement. “Having successfully grown our cash flow on steady gains in production, it is now time for Nostra Terra to take its next leap forward.”

Nostra Terra plans to engage a specialist firm, with specific experience in horizontal drilling in the Permian Basin, to create a field development plan for the Mesquite Prospect, the release said.

Additionally, Nostra Terra said it intends to increase its Permian Basin acreage further and has identified a number of additional acquisition targets, potentially suitable for horizontal drilling.

Onshore