Pilgrim Pursues Permian Basin Opportunity

Pilgrim Petroleum Corp. has entered into an RFP for participation in exploration, development and operations of oil and gas interests owned by The University of Texas.

University Lands in Midland, Texas, manages the 2.1 million acres of Permanent University Fund Lands in West Texas. Currently oil and gas rights are leased via a sealed bid process, with the highest bonus generally determining the bid winner. Leases have a 3-year primary term and 25% royalty.

The Permian Basin produces 17% of the nation's crude oil and 2/3 of Texas' crude oil. Proved reserves of oil in this area are second only to Alaska, which contains 21% more oil reserves. Production in the Permian Basin represents over 1 million barrels of oil per day, which is 20% of lower 48 production. The Permian Basin accounts for 68% of Texas' total production and 80% of Texas' reserves. The Permian Basin also produces nearly 4 billion cubic feet of natural gas each day. The top three operators in the area are EOG Resources, Abraxas Petroleum Corp., and Anadarko Petroleum Corp.

Pilgrim's CEO, Rafael Pinedo, said, "This opportunity will represent a significant impact on Pilgrim's value of its current asset portfolio and the continuance of Pilgrim's acquisition program."

Pilgrim Petroleum Corp. is an independent oil and gas company based in Irving, Texas. The company is acquiring oil and gas leases, producing properties, mineral rights, and surface interests primary on marginal fields. Once acquired, the company intends to redevelop each property to maximize the income from each property by refurbishing and improving the existing production.