TXCO Resources expands Texas holdings for nearly $20M

TXCO Resources Inc. bought additional acreage and oil and gas reserves in East Texas for $19.6 million.

San Antonio-based TXCO (NASDAQ: TXCO) bought the oil and gas leases in the Fort Trinidad Field through a series of several private transactions. The company now controls 36,498 gross acres with joint venture partners, or the equivalent of a net 20,526 acres.

Before this latest transaction, TXCO controlled 18,000 gross acres, or 8,000 net acres.

The new holdings also include 8.1 billion cubic feet equivalent of proved reserves at year end, bought at an average cost of $2.06 per thousand cubic foot equivalent.

TXCO first entered the Fort Trinidad Field as part of its 2007 buy-out of Output Exploration LLC. The field encompasses parts of Houston, Madison and Leon counties in East Texas. TXCO is targeting the field's Glen Rose shoals. Its first Glen Rose shoal well has already begun producing while a second well is currently drilling. TXCO expects to have a second rig working in this area by mid-April.

"Fort Trinidad is a good fit with our core, Maverick Basin area because it it prospective from similar formations that we know well, the Glen Rose, Buda, Austin Chalk and Eagleford/Woodbine formations," TXCO Chairman and CEO James E. Sigmon says.

TXCO is an independent oil and gas company with operations in the Maverick Basin, the onshore Gulf Coast region and the Marfa Basin in Texas and the Midcontinent region of western Oklahoma.