Houston American Energy signs agreement to purchase interest in Permian Basin assets

Houston American Energy has entered a participation agreement with Founders Oil & Gas III to acquire 25% working interest in two lease blocks located in Reeves County, Texas.

The acquired assets cover an area of nearly 800 acres.

Houston American Energy acquired the stake at a purchase price of $5,500 per net mineral acre. The total cost to Houston American is $1.1m.

Houston American Energy president and chief executive officer John P. Boylan said: “After evaluating numerous opportunities over the past year, we are excited to have identified and agreed to participate in this Delaware Basin prospect and to develop a long-term relationship with Founders.

“We expect to initially target the Wolfcamp shale and Bone Springs formations, commonly referred to as the WolfBone play.”

Founders Oil and Gas will continue to serve as the operator of the acquired property. It intends to begin drilling the first well by 1 July this year. The well will target potential resources located within the Delaware Basin, a sub-basin of the Permian Basin, West Texas.

The acquisition is subject to customary closing conditions and approvals, which also include Houston American's ability to procure necessary financing for this transaction.

This company expects to close the deal by mid-January.

Headquartered in Houston, Texas, Houston American Energy is an independent energy company focusing on oil and natural gas wells, minerals and prospects. It owns a wide portfolio of onshore assets in Texas and Louisiana, as well as development concession in the South American nation of Colombia.

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Image: Active Permian Basin pumpjack. Photo courtesy of Zorin09 / Wikipedia