American Oil and Gas Reporter - June 2024 - 62

SpecialReport: Permian Basin Playmakers
Texland Petroleum LP is focused on 3-D seismic-guided vertical drilling projects on
the Central Basin Platform, with all new wells designed for waterflooding to sweep
oil from low-permeability formations, namely intervals in the San Andres and Clear
Fork formations.
interval may be on the order of 200 feet
thick. On the low end, a frac may include
only 20,000 pounds of sand.
" If we do pump a frac, it will be a
very small treatment because there is always
water sitting right underneath the
zone, " Wilkes says. " Any sizeable frac
can intrude into oil-water contact and
the well will produce a lot of water. "
In all new drilling, waterflooding is
anticipated from the outset because of
the low-permeable rock with " dead " oil,
he says. Generally, the company does
pattern floods on typical 1-to-1 injectorto-producing
well ratios.
Although Texland has drilled horizontally
and drills directionally, most
of its acreage lacks unconventional potential.
Conventional work also is best
for a company that self-finances, Wilkes
points out.
" The cost for vertical wells is $1 million-$2
million per well, which is a
fraction of the cost for an unconventional
well, " he explains.
Permian Expansion
In recent months, U.S. Energy Development
Corp. has committed $500 million
to 10 acquisitions, including nonoperated
interests in the Midland and Delaware
basins, and acquiring additional interests
in operated Delaware Basin locations.
This year, the company will participate
in upward of 100 horizontal wells, reports
Chairman and Chief Executive Officer
Jordan Jayson.
The Fort Worth-headquartered company
continues to add Permian assets and build
its position with the goal of achieving a
50/50 split in operated versus nonoperated
62 THE AMERICAN OIL & GAS REPORTER
projects over the next three years.
Consolidation across the Permian
means additional partnership opportunities,
Jayson says. " We are opportunistic and
flexible when it comes to deal size and
structure, " he comments. " We want to be
considered a good partner and can bring
value to the table as companies further
develop core areas and possibly divest of
noncore assets. "
Strategic partnerships over the past
18 months include a $300 million commitment
to participate in the development
of 75 near-term Midland Basin horizontals.
A second transaction includes a 25% interest
in 60 Delaware Basin wells to be
developed over the next 24 months.
In addition to strategic joint ventures,
the company is aggregating various interests
in single pad units having clear
development timelines.
" We are looking at larger, quick-cycle
type deals between $1 million and $25
million, and then assessing strategic transactions
to participate in other companies'
development plans, anywhere from $100
million to $300 million, " Jayson says.
Altogether, the company is managing
production of some 30,000 boe/d on
behalf of itself and its partners, Jayson
relates. He adds that the company is actively
pursuing numerous operated projects
with hopes of transacting this later
this year.
" We are pursuing transactions with the
aim of allowing us to continually be operating
two rigs throughout 2025, " he adds.
Jayson did not disclose partnership
details, but did acknowledge the firm's
joint venture interests with large public
companies, including several majors, and
private players.
Although it has significant nonoperated
reserves today, U.S. Energy also operates
80 horizontal wells and counting across
its Permian, Eagle Ford, and Mid-Continent
positions. The Delaware Basin, however,
continues to be the focus for the
firm's recent operated projects. Strong
results from the five-well JT Morris pad
in Reeves County include a combined
5,000 boe/d, about 85% of which is oil
produced through restricted chokes,
Jayson concludes.
❒
Although it has significant nonoperated reserves, U.S. Energy Development Corp.
continues to add Permian assets and build its operated position.
American Oil and Gas Reporter - June 2024

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