Rosetta Resources acquires oil-rich assets in Permian's Delaware basin
HOUSTON -- Rosetta Resources today announced it has entered into a definitive agreement to acquire Permian Basin assets from Comstock Resources a purchase price of approximately $768 million, subject to customary closing adjustments.
The acquisition covers 53,306 net acres located in Reeves and Gaines counties in West Texas. The Reeves County assets located in the Delaware Basin include 40,182 net acres and 74 producing (52 operated) primarily Wolfbone wells.
Total current net production is approximately 3,300 boepd of which more than 73 % is oil. Rosetta projects significant growth potential for the area based on an estimated 1,300 gross, or nearly 800 net well locations targeting the Wolfbone on 40-acre vertical well spacing. The Company estimates total net risked resources potential of 145 MMBoe, of which 67 % is oil and 82 % liquids.
Potential upside also exists from further vertical well down-spacing and potential horizontal drilling, including the Wolfcamp formation, none of which is currently included in the resource estimate. Rosetta would be the operator of the majority of the Reeves County assets.
The Gaines County assets located in the Midland Basin cover 13,124 net acres and are currently un-delineated. Potential exists for multiple exploratory opportunities in the area. The Company's resource estimate for the Permian Basin acquisition excludes potential future resources from the Gaines County acreage.
"This oil-targeted acquisition is an important next step in Rosetta's strategy to pursue new growth opportunities and build our inventory of long-lived, oil-rich resource projects. These assets complement our Eagle Ford properties and are a good fit with the experience and technical knowledge of our operations team," said Jim Craddock, chairman, CEO and president. "This transaction provides entry into the prolific Permian Basin with both existing production and strong growth potential in proven delineated areas as well as prospective exploration targets on undeveloped acreage. The addition of new capital project inventory provides competitive options as we prepare to deploy the free cash flow generated by our Eagle Ford assets."
The transaction is effective as of January 1, 2013 and is expected to close on or about May 15, 2013. The transaction is subject to title and environmental due diligence and other customary closing conditions. The Company has secured an additional $700 million of committed financing for the transaction with the potential of accessing the capital markets prior to closing