Mexco Energy Corp. (NYSE MKT:MXC) has acquired additional working interests in a joint venture. The company's working interest in this development of seven horizontal wells in the Wolfcamp formation of Reagan County, Texas, was increased from 0.57% (0.49% net revenue interest) to 1.4% (1.2% net revenue interest), increasing the estimated drilling costs from $350,000 to approximately $850,000. These wells are to be drilled during 2014 using horizontal pad drilling and 50-stage zipper frac stimulation.
Mexco also announced plans to participate in the drilling of a horizontal development well in the Wolfcamp formation of the Lin field of Reagan County, Texas. This well, operated by EOG Resources Inc., is the fourth well on a 524-acre unit. Mexco's working interests in drilling and completing this well at a cost of approximately $51,000 is .8% (.61% net revenue interest).
Mexco acquired long-lived non-operated producing properties consisting of approximately 50 oil wells operated by Cross Timbers Energy LLC, a joint venture of Exxon Mobil Corp. and MorningStar Partners LP, in Hockley County, Texas, and 15 oil wells operated by Four C Oil & Gas Corp. in Pecos County, Texas. The purchase price of $200,000 was funded from the company's $4.9 million bank credit facility. This purchase includes working interests of, respectively, .42% and .67% (net revenue interests of .31% and .59%).
Mexco purchased for $57,000, an interest in 320 gross acres (15 net mineral acres) subject to a 3/16ths royalty lease in the Bakken shale formation of Billings County, North Dakota. Mexco funded this purchase primarily from working capital and its bank credit facility. This acreage currently contains one newly drilled horizontal well operated by Continental Resources Inc., the results of which have not yet been announced. All of this acreage is free of expenses to Mexco for drilling, development, and operations.