Southern Energy Corp on Tuesday said that it has entered a deal with PetroTX Energy LLC to buy the remaining producing acreage in the Gwinville Field, Mississippi.
Southern Energy is a natural gas exploration and production company, focused on acquiring and developing conventional natural gas and light oil resources in Mississippi, Louisiana, and East Texas.
Shares in the company were trading 15% higher at 22.99 pence each in London on Tuesday morning.
Southern Energy will buy the remaining acreage at Gwinville in Jefferson Davis County, Mississippi, for a cash purchase price of $3.2 million.
Under the terms of the agreement, the firm has also agreed to grant PetroTX minor overriding royalties over two of the asset’s wells, which currently are not producing and would require remedial work to re-commence production.
Southern Energy recently began a field redevelopment program in Gwinville by employing modern horizontal drilling and multi-stage stimulation techniques on ten operated wells drilled to date.
The newly-acquired acreage is expected to increase well inventory in Gwinville by as much as 20%, and should allow Southern to design the surface and bottomhole field development plan ‘more efficiently and cost-effectively’.
Chief Executive Officer Ian Atkinson added: ‘Our team will seek to incorporate these operations with our own, achieving substantial synergies and cost savings that will help drive a very quick return of capital even at current natural gas pricing. The finding, development and acquisition metrics of the assets are outstanding and will add over 20 Selma Chalk drilling locations to our already deep inventory in the Gwinville Field.’
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