Lonestar Asset Management, a private equity firm focused on identifying lucrative drilling opportunities, has finalized the funding for the acquisition of significant Texas acreage, most of which was held previously by Chesapeake Energy.
By finalizing the acquisition Lonestar will be able to initiate an aggressive drilling schedule beginning this January.
Lonestar Asset Management aims to continue and extend the momentum caught in 2018. Like many other mid-level producers, Lonestar is taking advantage of the big companies’ shift of focus to the Permian basin by producing reserves that companies like Chesapeake never made it to prior to leaving the area.
Lonestar CEO Beau Flowers said: “Deals like this are exactly what we look for when evaluating prospects. This happens more often than you’d think when a new formation is discovered, much like the one they discovered in the Permian Basin.”
In Texas, oil has its own ecosystem, large and small corporations are able to coexist and run successful exploration & drilling projects together. The difference is, for larger corporations like Chesapeake Energy it’s easy to drop the project and head out at the slightest wind of a more lucrative formation. This enables smaller, more nimble companies with adequate resources an opportunity to continue on with the projects.
Flowers said: “Big companies know they have to strike while the iron is hot, plus they have the money to do it. They can just pack up and head out to the next boom. In this case, like most cases, they left a lot of oil in the ground … since we have their research and data to support the prospect’s viability it wasn’t a hard decision for us to make. We’ll basically pick up where they left off, and in this case, we really like where they left off.”
Source: Company Press Release