The return of oil M&A activity and Vein Petroleum’s new Texas investment

As oil prices are returning to the norm, M&A activity is once again increasing for maturing and smaller-sized oil fields. Meanwhile, larger energy companies are divesting parts of their oil portfolios, including producing and inactive fields, in order to further invest in gas and energy transition projects. This divestment is being driven by the rapid rising of gas demand in Europe, Africa, and Latin America, and investor pressure for more carbon-neutral projects. With the ongoing global divestment and upcoming licensing rounds in Africa and Latin America, we are sure to see new deals taking place in the aforementioned regions, and the US, as the SMEs are seizing the opportunity to acquire low-cost projects with easily available buyers.


A great example of a company accessing these opportunities is Vein Petroleum USA.


Africa and US-based company Vein Petroleum invests in Texas opportunity


In addition to their maturing acreage in Nigeria, Vein Petroleum recently acquired a 38% working interest in the Lester Unit Acreage in Texas, operated by Baron Energy Inc, effective from the beginning of August 2021. In addition to the working interest, Vein Petroleum secured a Net Revenue Interest (NRI) of 28.12%.


The Gonzales County acreage currently has two wells drilled, targeting the Austin Chalk Formation, titled Lester Unit 1 and Lester Unit 2


Vein Petroleum, IN-VR, Lester Unit, Texas, Baron Energy
Outline of Lester Unit Acreage

The first horizontal well has been in production for the past 20 years, currently producing an average of 1.5 bpd, while the second well began drilling in 2019 but was suspended due to low oil price, and the ensuing challenges created by the pandemic.


Currently, work is continuing in order to complete Lester Unit 2 and begin production by the end November 2021, with initial production estimates at 130 bpd for the first 2 years. The projected rate of return is around 89% at $65 oil price with a payout time of less than 18 months.


The Current operation on LU2 includes 3 phases:

  1. Drilling out set plugs

  2. Frac operations, testing & flowback

  3. Moving tanks and setting equipment in place.

Vein Petroleum, IN-VR, Lester Unit, Texas, Baron Energy
Ongoing Well Reentry Operation at Lester Unit

If you would like to learn more about Vein Petroleum US projects, or have an opportunity you would like to raise capital for reach out to Romina Krauss at romina@in-vr.co