Energen finalises agreements for Delaware and San Juan basin assets in US

US-based Energen has finalised and closed agreements worth $551.7m for its non-core Delaware basin and San Juan basin assets with undisclosed buyers.

In April this year, net production associated with all the non-core properties that are being sold averaged nine thousand oil-equivalent barrels per day (boepd), and out of this only 34% was oil.

The majority of the production is in San Juan.

The non-core assets in the Delaware Basin, for which sales are closed or pending, reflect unproved leasehold of about 55,000 net acres.

Energen chairman and CEO James McManus said: "This position of financial strength allows us a great deal of flexibility to pursue additional capital investment opportunities in the Permian Basin in 2016 and 2017, including increased drilling and development and acquisitions.

"To that end, we are increasing our capital investment in 2016 to approximately $450m to further build up our inventory of drilled but uncompleted wells (DUCs) at the end of the year.

"Up to $130m will now target the Delaware Basin, where we plan to drill 17 to 19 net DUCs in the second half of 2016."

In total, the company expects to end the year with about 54 to 58 net DUCs in the Permian Basin.

Energen has about 68,500 net acres with 2,546 net identified locations in seven horizontal formations within the core Midland basin.

Following the closing of all these deals, the company will have about 42,200 net acres in the Delaware basin in Texas and New Mexico with 954 net identified locations in four Wolfcamp shale formations.

On the Delaware basin, the company has identified 675 net locations, which include 148 net locations with at least 10,000 foot laterals and another 217 net locations with average lateral lengths of 7,500ft.

The company plans to close asset sales by mid-August this year and expects to incur minimal taxes in association with these transactions.