On October 13, Linc Energy’s wholly owned subsidiary, Linc Gulf Coast Petroleum, Inc. finalised its purchase of oil and gas assets from ERG Resources L.L.C. ("ERG").
The 13 oil fields and production facilities purchased from ERG are located in Texas and Louisiana and are within the Gulf Coast Onshore and Inland Waters Regions. The purchase of 156 leases covering approximately 13,400 acres also includes all related infrastructure such as pipelines, tank batteries and processing facilities. All of the fields are either salt domes or geological structures related to deep-seated salt movement.
"The ERG acquisition gives Linc Energy traction in one of the premier oil and gas arenas of the United States and a base from which to expand. It also further ensures Linc Energy is cash flow positive in the near term," said CEO Peter Bond.
Eleven of the fields are located along the Texas Gulf Coast and Texas Inland Waters areas. Significant oil production in Texas is attributed to the Barbers Hill, High Island, Port Neches, Atkinson Island and Cedar Point fields. Linc Energy anticipates additional production being attributed to these areas, with particular focus being paid to increasing production from Barbers Hill, Port Neches and the Black Bayou assets.
The Black Bayou field and portions of the Leeville field are part of the ERG assets in Louisiana. Linc Energy plans to aggressively drill in the Black Bayou field in the coming 12 to 24 months to build production.
Cumulative production for the 13 fields is estimated to be over 700 million barrels of oil to date with a regional recovery factor of approximately 40%, indicating potential to achieve substantial increases in production from Enhanced Oil Recovery (EOR).
Linc Energy plans to increase production through well optimisation and additional drilling. Independent reports indicate that the fields have the potential to increase recoverable oil by up to 24 million barrels.
Linc Energy has also taken over the ERG office in Houston to support its Texas & Gulf Coast operations, with many of the ERG employees joining Linc Energy, ensuring a seamless transition.