Victory Energy Corp. will acquire 181 net barrels of oil equivalent per day (boe/d) in the Woodbine through a letter of intent (LOI), the company said Nov. 12.

The purchase price will be about $7.8 million, of which about $6.9 million will be paid in cash. The remainder will be paid in shares of Victory common stock.

Exclusivity with the seller will be maintained through the LOI term, Victory said. There is an option for Victory to acquire a 50% reduced working interest in acreage acquisitions within a defined area of mutual interest.

There is production of 181boe/d from three existing wellbores, and 1,370 net acres are currently HBP containing future development opportunities in the Lower Eaglebine, Georgetown, Edwards and Glen Rose (Buda-Rose) formations.

There should be about 77.1% to 88.6% working interest in three producing wells and about 38.6% to 44.3% working interest in the HBP acreage. Upon closing, this acquisition could increase total PV-10 reserves to more than $10 million, Victory said.

Both vertical and horizontal drilling opportunities exist, and drilling and development of the first proved undeveloped locations is scheduled for late 2016, the company said.

Completion of the acquisition is subject to a due diligence review of the properties and approval from certain third parties, Navitus Energy Group, Victory's other banking and financial firms, and definitive documentation by Victory and the seller.

Victory Energy Corp. is based in Austin, Texas.