(WO) — UK-based BritENERGY Group is expanding its upstream investment in the U.S., acquiring a controlling interest in 13 oil and gas wells across 3,000 acres in New Mexico’s Permian basin as the company criticizes the increasingly difficult investment environment in its home market.
The acquisition includes five producing wells, two of which are new horizontal wells, near Hobbs in Lea County. BritENERGY is targeting 5 MMbbl of production from the acreage by 2032 and expects the development to generate approximately $200 million in profit.
The wells and associated production facilities represent approximately $50 million in capital investment. BritENERGY is also planning a 300-MW solar development at the site.
The move comes amid mounting criticism of the UK’s energy policy from domestic oil and gas companies. bp recently announced plans to sell its longstanding UK North Sea upstream business, while Hunting CEO Jim Johnson has described the UK as “uninvestable.”
“Britain has had enormous advantages in engineering and access to capital. But the country is becoming so hostile to investment that it is heading to energy zero faster than net zero,” said BritENERGY Chairman Garry Mahoney.
Mahoney contrasted the UK investment environment with opportunities in the U.S. and Morocco, where BritENERGY is also negotiating a natural gas production agreement.
“For energy companies the U.S. and Morocco are open for business,” Mahoney said, arguing that their energy policies provide a more attractive environment for investment. He criticized UK policy for failing to provide either affordable or secure domestic energy.
BritENERGY’s New Mexico investment adds to a broader shift in the company’s activity outside the UK while giving it a foothold in one of the world’s most prolific oil-producing regions. The acquired U.S. businesses have been audited by Deloitte, with Brodies LLP advising BritENERGY on the transaction.
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