The Permian Basin is located in West Texas and Southeastern New Mexico. It has been producing oil for over 80 years with cumulative production of over 30 billion barrels. The Basin has produced over 6 billion barrels from the San Andres reservoir with over 2 billion barrels coming from the San Andres found on the Central Basin Platform. Capstone II’s focus is on properties that produce from the San Andres and other conventional reservoirs found on the Central Basin Platform.
The ownership and production of oil in the Permian Basin was once dominated by major oil companies. Many of the majors systematically divested of their Permian properties in the 1990’s, selling their holdings to independents and individuals. In many cases these small, independent companies lack the capital to develop assets or they lack the technical team to properly exploit them. Capstone II’s team recognizes the potential that exists to purchase such underdeveloped properties in the Permian Basin. Our niche in such acquisitions exits in our willingness to identify small acquisition targets of one-hundred sixty acres or less, identify the owners, and negotiate directly with the owners to acquire the properties. Most major companies and large independents are not willing to expend such an effort for these properties.