The Oxy Yates Lease is located in Eddy County, approximately 8 miles north of Carlsbad, New Mexico. Eddy County is in Southeast New Mexico. It is bounded by Chaves County to the north, Otero County to the east, Loving County, Texas to the south, and Lea County to the west. Eddy County covers 4,198 square miles. The asset is located in the Delaware Basin and is producing oil and gas that is stratigraphically trapped in the Yates and the Lower Yates formations of the Artesia Group.;
The Oxy Yates Fed wells were drilled in the late 1990s and early 2000s. Currently, there is 1 producing well and nine shut-in wells, producing 15 MCF/day. Production to date is 27,000 barrels of oil and 425 MMCF of gas with minimal water.
Permex plans to optimize production from the lease through acid treatments, clean -out of the wellbores and downhole pump replacements. In addition, Permex will be evaluating the results of 10 acre downspacing in the Yates formation on the lands one mile to the east in order to start a drill program on the field within the Yates sands.
Permex holds a 100% Working Interest in the lease, and a 77% Net Revenue Interest
The Oxy Yates covers 680 acres HBP. The productive Yates sandstones in this region of New Mexico typically consist of poorly consolidated, silty, to fine grained rock with porosities of 15 to 28 percent. The clean, productive sandstones are often interbedded with tight argillaceous sandstones. The oil bearing sands occur at the relatively shallow depth of 900 feet. The Yates sand of Permian age is 50 to 60 feet thick.