By Birmingham Business Journal

Energen Corp.â¿¿s oil and gas exploration and production company has purchased three-year leases for approximately 17,000 net acres in the Bone Spring and Avalon shale trends in the Permian Basin from various Texas state agencies and other entities for $15.3 million.

The Birmingham-based energy company (NYSE: EGN) estimates that the acreage in Reeves, Ward, Loving, and Winkler counties offer potential for approximately 50 Bone Spring locations and 50 Avalon shale locations.

Energen estimates that drilling and completion costs are approximately $7.5 million per well. Energen has drilled eight Bone Spring wells in Ward and Winkler counties and participated in another 23 wells; the company announced plans in December 2010 to drill another 13 Bone Spring net wells in 2011 and at least one Avalon shale well.

Potential drilling plans on the new leases in 2011 have not been determined.

In other developments, Energen closed last month on its previously announced acquisition of 10,360 net Wolfberry acres from a private seller for $75 million. The effective date of this transaction was December 1, 2010.

Copyright 2011 American City Business Journals
Copyright 2010