Camber Energy Inc. (NYSE MKT: CEI) said Feb. 24 it made a deal to expand its Permian Basin position to roughly 16,000 net acres.

For about $11.03 million, a subsidiary of the Houston-based company will acquire Permian oil and gas leases in Yoakum and Cochran counties, Texas, known as the Arrowhead Project, from private sellers. The deal will initially be 100% funded by Jaffe Energy Inc. (JEI).

The Arrowhead Project covers a contiguous block of about 15,500 gross (13,000 net) acres targeting the San Andres Formation. Concurrently with the acquisition, Camber entered an exploration agreement with certain undisclosed joint venture (JV) partners for a proprietary technical, geologic database over the project.

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As consideration, the JV partners have the option to own up to a 10% working interest, 5% of which is carried in the lease acquisition. Camber will own the remaining 90% to 95% working interest in the leasehold and will control operatorship of the subject properties.

The acquisition also includes a completed horizontal San Andres well and a saltwater disposal well, both currently shut-in. Camber said it plans to put the San Andres well back into production once the saltwater disposal well is placed into service.

Anthony C. Schnur, Camber CEO, said the acquired acreage is geographically separate from the company's other San Andres position and "expands and diversifies our exposure to this new play."

"We continue to maintain an aggressive growth posture and are intent on building shareholder value through field redevelopment, drilling and continued strategic asset acquisitions," Schnur said in a statement.

The transaction, which is targeted to close on or before March 30, is subject to, among other things, certain purchase price adjustments pursuant to title confirmation and a customary due diligence investigation.