Spur Energy purchases Permian assets from Concho for $925 million

Concho Resources, which has been recently struggling financially, would utilize the funds to reduce debts and start a share buyback program to appease the Wall Street.

Spur Energy Partners would continue to build its foothold in the northwestern shelf of Permian, which falls outside the Delaware Basin at New Mexico.

Midland’s Concho Resources, a hydrocarbon exploration company reportedly announced that it would sell its Permian Basin assets at New Mexico to Spur Energy Partners, a Houston oil and gas startup for $925 million.

Concho Resources, which has been recently struggling financially, would utilize the funds to reduce debts as well as to start a share buyback program to appease the Wall Street. Meanwhile, Spur Energy Partners would continue to build its foothold in the northwestern shelf of Permian, which falls outside the Delaware Basin at New Mexico.

Concho stated that it is initiating a share repurchase program of approximatley $1.5 billion that would help to boost the stock of the company. This sale comprises of around 100,000 gross acres generating 25,000 barrels of oil in a day. Concho would retain its prominent presence inside the Delaware Basin at New Mexico.

Spur Energy was created previously in this year by Jay Graham, who is the founder of the company. Jay Graham and associates sold Houstons WildHorse Resource Development for $3 billion in 2018 to Chesapeake Energy to Spur Energy its start. WildHorse aimed at the northeastern region of Eagle Ford shale.

Spur collaborated with private equity company KKR & Co. for investment to develop gas and oil acreage in the thriving Permian Basin, beginning with mature shelf of New Mexico on Permian’s edges. Spur initially purchased shelf acreage in the spring from Percussion Energy, Houston.

Concho took the decision to aim at the fields of growth and not the mature legacy assets.

Source credit: https://www.chron.com/business/energy/article/Concho-sells-Permian-assets-to-Houston-s-Spur-14408721.php

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