Liberty Energy Corp. (OTCQB: LBYE) has executed terms on the acquisition of a producing oil and gas lease in Archer County, Texas, covering 140 acres with 21 oil wells and two injection wells.
The lease has current production of a range of 8-10 bopd from producing wells. The wells are producing from 1,400-foot to 1,500-foot pay zones and new logs show potential additional zones up hole. This lease has rights to all depths which include Cisco, Thomas, Gunsight Sands, Milham Sands and KMA Sands. The lease has a 100% working interest and 80% net revenue interest.
The purchase and sale agreement will be filed in an upcoming 8k outlining the terms and conditions of the transaction. In general terms, Liberty has agreed to pay $100,000 cash plus $300,000 worth of restricted stock with an extended leak-out. Sellers will retain a minority carried interest in workover and infill drilling wells subject to a before-payout return to Liberty of 125% of capital invested.
Liberty will accelerate an aggressive work over program to improve production from the current wells on the lease while engineering an infill drilling program to maximize reserve recovery and access additional pay zones. Workovers have already been initiated on the leases by the seller and updates on improved production will be released in subsequent announcements. These workovers will typically improve production to 2-3 bopd and new drills have historically been completed doing 15-20 bopd.