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PEDEVCO to grow Permian Basin acreage position, details drilling program

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PEDEVCO to grow Permian Basin acreage position, details drilling program

PEDEVCO Corp. agreed to acquire about 22,000 leasehold acres in the Permian Basin from a private operator and announced plans to drill a new horizontal well on the acreage before March 1.

The assets included in the deal are a producing horizontal well, a salt water disposal well and several other wells capable of producing, which are situated in the San Andres play on the northwest shelf of the Permian Basin in New Mexico. The Houston, Texas-based company expects the wells capable of producing to increase production from the asset to above 100 barrels of oil per day with slight repairs, according to a Jan. 14 news release.

PEDEVCO, which does business as Pacific Energy Development, would own more than 45,000 leasehold acres in the Permian Basin, adding to its 12,000-acre DJ Basin core position in Colorado, upon closing of the acquisition.

The company also said it reached total depth on the first four wells of its planned 16-well program in its Permian Basin asset area. PEDEVCO aims to complete all four wells by the end of the first quarter.

Separately, the company closed a deal where it received $15 million in convertible debt funding from investment firm SK Energy LLC, which is owned by PEDEVCO CEO Simon Kukes. The debt is convertible into PEDEVCO common stock at a $1.50 per share conversion rate. PEDEVCO plans to use proceeds from the funding to complete the four new wells in its 16-well program, to fund the well to be drilled on the newly acquired acreage and to fund operations and possible acquisitions and developments in the Permian and DJ basins.