Cano Petroleum to purchase Texas-based Square One for undisclosed sum

Exploration and production independent Cano Petroleum said it has signed a letter of intent to acquire Square One Energy, a Texas-based oil and gas operating company, for an undisclosed amount of cash.

Square One’s assets include a 100 percent working interest in 11,000 acres of mature oil fields in central Texas with current net production of 70 barrels of oil per day from 34 wells.

The field thus far has produced roughly 17 million of an estimated 100 million barrels of original oil in place, Cano said, adding that the company is optimistic waterflooding and Alkaline-Surfactant-Polymer technology will be viable enhanced recovery methods on the property.

The deal also would include other assets such as a gas processing plant, production equipment, a field office and an office building.

“With this deal, Cano would be the beneficiary of substantial existing infrastructure investments, resulting in significant cost savings as we move forward with future drilling and field development,” said Jeff Johnson, Cano’s chief executive officer.

Cano said it expects the acquisition to close within 60 days and that it would be financed with a combination of cash and stock.

—Ray Tyson