Exterra Energy has increased its presence in the Permian Basin area. The company has acquired an additional 480 acres of leases to its existing production and interest in Pecos County.
This acquisition will provide Exterra with approximately 20 to 30 new additional proven undeveloped drilling locations for expansion in the Cardinal Field. These new locations could significantly increase production of oil and gas from several different formations such as the Queen Sands and San Andres. Historically, wells in this area have come in at an average of 10 to 20 BOEPD at relatively shallow depths. This drilling opportunity is a low risk high reward endeavor due to the inexpensive cost of drilling and the offsetting production in the field. This will allow Exterra to generate another significant revenue stream at a relatively low cost. Wells drilled in and around the Cardinal Field have shown to have long life reserves with very minimal declines. The Permian Basin of western Texas and southeast New Mexico is considered by many to be a world-class petroleum basin.
Todd R. Royal, the President of Exterra stated, "This acquisition, based on our current work-over strategy provides further opportunity to expand our operations in the Permian basin allowing us to maximize our returns and increase our shareholder value. The Permian acquisition also further reinforces the overall strategy of the new management, which is to capitalize on current assets and acquire new assets with great upside potential. This is another step in a chain of events that we expect to take place in the future to build the value of Exterra."
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