Forty Acres Energy begins waterflood in Permian

By Luke Geiver | August 07, 2018

Forty Acres Energy LLC is planning to deploy a novel oil production method in one of the world’s most productive oil plays. After forming an acre unit spanning nearly 8,000 acres, the Houston-based private oil and gas company will commence a waterflood in the Permian Basin. Since July, Forty Acres has been injecting wastewater into fields located within its Lea County, New Mexico acreage, called the West Eumont Unit. Water infrastructure was previously purchased along with a third-party agreement with a water supplier for injecting the water.

“The West Eumont Unit is located in one of the most prolific oil producing regions in the world,” said John Crum, non-executive chairman for the company.

According to the company, the unit could yield 20 to 30 million barrels of oil in addition to the 10 million barrels that has already been produced there. The unit is estimated to have nearly 120 million barrels of oil in place.

For the existing operations, Forty Acres has used existing wells along with five newly drilled wells. The new drill wells consist of one producer and four injectors drilled to a total depth of roughly 4,500 feet, all for an average cost of approximately $500,000 per well. In nearly 8 months, the producer wells should pay out and recover 150,000 barrels of oil. The four injector wells are pushing 400 to 500 barrels of water downhole per day, the company said. Full field development of the West Eumont Unit will include up to 400 wells for a cost of roughly $100 million. The investment could yield up to 8,000 barrels of oil per day during peak production.

“Forty Acres has assembled a large, strategic waterflood unit along with critical infrastructure in an area with significant primary and secondary development opportunity,” said Forty Acres CEO Huxley Song. “We are excited to reach the important milestone of commencing waterflood operations in our initial pilot area and look forward to developing several more areas and growing production meaningfully in the near term.