Pyramid Petroleum, Inc., a small exploration and production independent, has entered into an option agreement to purchase a 20% non-operated interest in a planned acquisition of undisclosed oil and gas properties in the Gulf of Mexico.
The purchase would complement Pyramid's current production of about 170 barrels of oil equivalent per day in the U.S. Gulf and would consolidate and increase the company's reserve base in the region.
If Pyramid exercises its option as expected, the company's production would more than double, increasing to roughly 665 barrels of oil equivalent per day from current production of about 325 barrels per day.
In addition, the planned acquisition has a substantial potential to increase production by completing behind-pipe non-producing horizons, Pyramid said.
The purchase would also increase Pyramid's proved and probable reserves to about 2.71 million barrels oil equivalent, adding proved and probable reserves net to Pyramid of 1.38 million barrels, consisting of 490,000 barrels proved and 890,000 barrels probable.
The planned acquisition is a varying working interest, ranging from 5% to 20%, in 12 producing and 40 non-producing wells in the Gulf of Mexico. Pyramid's 20% interest in the production would be approximately 340 barrels of oil equivalent per day, consisting of 200 barrels of oil per day and 850,000 cubic feet of gas per day.
Pyramid's 20% share of the contracted purchase price would be $7 million. Pyramid said it plans to finance the acquisition with production credits, debt and cash.
