Liberty Energy Purchases Baylor County Leases
To acquire 1,100 acres in Baylor County, including 17 oil wells, four injection wells and current production of 8 BOPD.
Liberty Energy Corp. (OTC: LBYE) executed a letter of intent (LOI) to acquire 1,100 acres on leases in Baylor County, Texas, in an all restricted common stock transaction, the company announced on Aug. 20.
The acquisition included 17 oil wells, four injection wells, and current production of 8 barrels of per day (BOPD) from operating wells with 75% working interest and 80% net revenue interest.
Phase 1 development on the Baylor County leases includes a workover of each of the 17 wells with expectations of 2.5 to 4 BOPD per well after workover. This is based on recent activity, local area results and the Liberty's operating partners expertise. There are four phases planned to increase the leases current production through workovers, radial jet horizontal drilling, recompletions and new infill drilling.
The Baylor County fields have historically produced many opportunities with multiple pay zones in the target areas that range from as shallow as 150 feet to over 2000 feet or more in total depth. On these leases, two pay zones account for all recorded production, the shallow gunsight sandstone from 1400 to 1500 feet and the 2000 feet Cisco Sand. The leases are estimated to contain a minimum of 10 to 15 multiple infill drilling locations with expectations based on historical initial production rates of between 20 to 30 BOPD.
Although the LOI allows for 60 days to complete the purchase and sale agreement, the company has submitted a draft for review to close the transaction as quickly as possible, subject to final due diligence and legal review. This acquisition is the first of several that the company intends to acquire within the North Central Texas/Fort Worth Basin which contains numerous oil and gas producing formations consisting of both conventional and unconventional reservoirs. Some of the production trends in the area include the Strawn, Bend, Marble Falls, Barnett shale, Chappel and Viola formations.
"This type of acquisition will be the model for continued growth for Liberty Energy Corp., offering both current production and upside through development. We look forward to aggressively making additional acquisitions to build up a nice portfolio of production and development potential for years to come," said Arthur Roy, CEO, in the release.
Liberty Energy Corp. is an exploration stage company engaged in the acquisition, exploration, development, production, and sale of crude oil and natural gas properties. The company is headquartered in Houston.