Mexco Energy Corporation has announced the purchase of various royalty interests ranging from 0.0018% to 1.1% revenue interests at a price of US$580 000 covering approximately 580 wells in 87 counties of eight states. Of this oil and gas production, virtually all is natural gas. Mexco believes that there is potential for further development of several of these royalties. These royalty interests are free of expenses to Mexco for drilling and operations.
Revenue from Barnett Shale
Approximately 90% of the net revenue from these royalties is produced by 157 wells located in the Barnett Shale of the Fort Worth Basin of Texas. Also included are interests in 423 wells in Alabama, Arkansas, Kansas, Louisiana, Mississippi, North Dakota, Oklahoma and Texas.
Also, Mexco announced an increase in its participation in a horizontal well to be drilled to a depth of 11 100 ft in the third Bone Springs formation of Lea County, New Mexico from 1.5% to 2.8% working interest. Mexco's estimated cost increased from approximately US$106 000 to US$196 000. This well will be operated by XTO Energy, Inc., a wholly owned subsidiary of ExxonMobil Corporation.
As previously planned, Mexco has advanced US$116 226, which is the estimated cost of drilling and testing two horizontal wells respectively in the A and B benches of the Wolfcamp formation in Reagan County, Texas.
These and other expenditures have been funded through cash flow and bank borrowings on Mexco's line of credit which totals US$4.9 million to date.
Mexco Energy Corporation, a Colorado corporation, is an independent oil and gas company located in Midland, Texas engaged in the acquisition, exploration and development of oil and gas properties.
Adapted from press release by Cecilia Rehn
Read the article online at: https://www.oilfieldtechnology.com/drilling-and-production/28112014/mexco-energy-corporation-announces-purchase-of-oil-and-gas-properties/