Mexco Energy Corp. (NYSE MKT:MXC) has reported the drilling of certain properties in the Permian Basin of West Texas and the acquisition of producing properties in four states.
Mexco is participating as a working-interest owner in a joint venture that is drilling four vertical development wells to a depth of 11,000 feet on 160-acre spacing in the Dean, Wolfcamp, Cline and Atoka formations on 640 acres in Reagan County, Texas. Initial per day production rates from two of these wells respectively are 128 barrels of oil and 110,000 cubic feet of natural gas and 94 barrels of oil and 179,000 cubic feet of natural gas. Mexco's working interest in this joint venture is .3% (.24% net revenue interest).
The Wolfcamp formation in this area is a 1,700-foot-thick section consisting of interbedded organic shales and carbonates, and it includes two reservoir units, the "A" and "B" benches, which have both been developed with horizontal wells. These four vertical wells in Reagan County are in addition to two horizontal wells in which Mexco is participating in the same county.
For $450,000, Mexco has acquired a package of non-operated producing properties consisting of 10 oil wells and 1 gas well located in Webster Parish, Louisiana; Eddy County, New Mexico; Billings County, North Dakota; and Nolan and Smith counties, Texas. The purchase price was funded from Mexco's $4.9 million bank credit facility.