Minerals and royalties company Formation Minerals Inc. has entered into a purchase and sale agreement with a private seller to acquire producing mineral interests in the Haynesville Shale.

The assets, in Bienville Parish, Louisiana, currently have three producing oil wells and operated by Aethon Energy Management LLC, which is testing 2-mile to 3-mile laterals for the wells.  The asset. Formation said it paid $220,000 in cash for the interests.

“The wells are in an excellent area that are just out of the decline curve with stable monthly production and with the upside of more wells to be drilled on the acreage,” Scott Cox, Formation’s president and CEO, said in the company’s June 27 press release. “We have great confidence both in Aethon as an operator and in these assets, and we look forward to jointly benefiting as they continue to operate and develop the area.”

Pre-permits have been filed for six to nine more oil wells on the property.

Formation is entitled to the cash flow from the property’s oil and gas production starting July 1, under the agreement.

The company said it expects to close on the acquisition July 26 following the satisfaction of customary closing conditions. Formation is working to secure the financing needed to complete the acquisition.

“We have been and continue to be diligent in buying properties at the right price and in the right areas, thus we believe the company and its investors will reap the benefits of the rise in commodity pricing, as well as the continued development of our acreage,” Cox said.

Comments