The company claimed that the purchase price of $6.5m was partially funded out of the closing of Tranche B of the recently completed asset reallocation financing transaction with Gulfstar Resources.
The leases covering around 1,040 acres comprise 125 shallow wells, some of which are shut in pending maintenance or recompletion work, while others are used as pressure maintenance water injection wells.
Currently, the wells are producing around 80 barrels per day, according to Armada.
Armada Oil CEO Randy Griffin said the acquisition represents a significant step forward in company’s current asset reallocation strategy.
"The expected long life production in this field and the ability to significantly increase PDP reserves at a low cost with almost no risk of dry holes provides a solid platform from which to expand into additional opportunities," Griffin added.
