Mid-Con Energy Partners LP (NASDAQ: MCEP) has entered the Permian Basin in an Oct. 13 acquisition agreement for net proved oil reserves estimated at 6.1 million barrels of oil equivalent (boe).

Mid-Con Energy paid an aggregate $120 million for the assets.

Mid-Con Energy said its subsidiary acquired several properties on the Eastern Shelf covering about 18,000 net acres in Coke, Coleman, Fisher, Haskell, Jones, Kent, Nolan, Runnels, Stonewall, Taylor and Tom Green counties, Texas.

The Eastern Shelf is comprised of mature producing assets that are in the early stages of redevelopment that offer primary production with waterflood potential.

The Dallas company uses the nickname “the waterflood guys” due to its expertise in more than 150 such wells in 13 states. Waterflooding increases production and recovery of oil in place by displacing oil from injection wells to producing wells.

Ethan Bellamy, senior analyst, Baird Energy, said the properties produced 1,197 boe/d in the second quarter of 2014. The acquisition price implies about $100,000 per flowing barrel (bbl) or $19.70/bbl of proved reserves.

“The mature assets are in the early stages of redevelopment and offer primary production with waterflood potential,” Bellamy said. “MCEP has secured committed bank financing to support the deal.”

The deal adds roughly 30% of reserves to the company’s 19.1 MMboe. Its average second quarter production was 2,725 boe/d.

Mid-Con Energy will operate the Eastern Shelf properties and will hold an approximate 96% average working interest across the acquired properties.

"In addition to accretion to our unitholders, other key benefits of this acquisition are scale and organic development potential through both primary and secondary activities," said Jeff Olmstead, Mid-Con Energy's CEO. "Representing greater than 20% of our current enterprise value, the addition of the Eastern Shelf properties will provide additional diversity to our portfolio and represent our entrance into the Permian Basin. In terms of potential, this acreage holds a number of attractive waterflood developments our technical staff is eager to develop."

In connection with the acquisition, the partnership has secured committed bank financing to support the purchase, which is expected to close November with an effective date of Sept.1.