Aug. 15–Houston-based Carrizo Oil & Gas said it’s growing in the booming Permian Basin by acquiring about 10,000 net acres from Oklahoma’sDevon Energy for $215 million.
Carrizo said the acreage in West Texas’Reeves and Ward counties fits geographically with its existing footprint in the Permian’s Delaware Basin.
Last year and earlier in 2018, Carrizo sold all of its assets in the gassy Marcellus and Utica shale plays, as well as in Colorado’sDJ Basin in order to focus exclusively on the Permian and South Texas’Eagle Ford shale.
Carrizo is bolting on Permian acreage now with the goal of ramping up activity about a year from now once new pipeline projects are completed that make it easier and cheaper to transport the oil and gas to port and refining hubs near Houston and Corpus Christi.
“We expect to seamlessly integrate these assets into our existing development plan for the area, which currently assumes a ramp-up in activity in the second half of 2019 as Permian pipeline takeaway is forecast to increase,” said Carrizo Chief Executive Chip Johnson. “Over time, we see the potential to achieve meaningful efficiencies through optimizing future large-scale pad development, drilling longer-lateral wells, and integrating the existing infrastructure within our system.”
The larger Devon Energy continues to see the Permian as a focus area, but it views this acreage as outside of its core region. Devon is nearing the end of a more than $5 billion divesture program so it can key in on its main operations and fund a large share buyback program to appease investors.
In June, Devon agreed to get out of the pipeline business by selling its stake in Dallas-based EnLink Midstream for more than $3 billion to the private equity-backed Global Infrastructure Partners in New York.
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