The acquisition of these assets in the Wolfberry trend in the Permian basin increases the company’s net acreage in Wolfberry by 20% and raises its average working interest in this play to 54% from 50%.
The transaction also adds over 170 identified Wolfberry drilling locations through 40-acre spacing and approximately 10,800 gross acres to the company’s acreage.
The company will fund the acquisition with borrowings under its credit facility and the transaction is expected to close in the first quarter of 2012.
Concho Resources said it will increase its 2012 capital budget to $1.37bn from $1.30bn to develop the newly acquired assets.
