[Editor’s Note: This story is part of an ongoing series focused on the top private producers in the Lower 48, including the features Veteran, Newly Listed Private Producers on Top 100 Hungry for M&A, Right Risk, High Return: Aethon Jumps on Elevated NatGas Prices, Anschutz: Powder River’s Winning Factor? Vast Potential,10 Years Strong: Surge Energy Powers Through the Midland Basin and PureWest Shrugs Off Uncertainty to Actively Pursue M&A]
Long a gas-weighted pure play, Jonah Energy is adding to its holdings and looking to grow its footprint across shale plays in the Lower 48.
The family office-backed company closed in July on its acquisition of High Plains Natural Resources with partner Burk Royalty Co. Ltd. The acquired assets include some 61,000 net acres and 250 operated wells across Yoakum County, Texas, and Lea County, New Mexico, in the Northwestern Shelf of the Permian Basin’s San Andres formation.
The wells are expected to produce an average of 15,000 boe/d during the third quarter with a product mix of 50% oil and 75% total liquids. The acreage position also includes substantial drilling inventory with development expected to commence in 2026.
The deal “enhances our cashflow and footprint in the Permian Basin following our successful acquisition of Tap Rock earlier this year,” said Jonah Energy CEO Brian Reger. “It aligns with our disciplined strategy of expanding in high-quality plays and strengthens our position as a leader focused on responsible, long-term value creation.”
In January, the company closed on its acquisition of Tap Rock Resources, an NGP-backed Delaware Basin producer in New Mexico. It was the first foray outside of the Rockies for Jonah, which has plans on growing well beyond the region.
Reger told Hart Energy that during the last two years, the firm has been building its foundation for growth, and that’s where the Tap Rock acquisition and more recent High Plains buy come in.
“Now we're executing on that plan, so the Tap Rock deal was the first of many,” Reger said.
Jonah is generally agnostic toward both basin and commodity, he said.
“We're looking to grow and gain cash flow and see where it takes us.”
While Jonah’s position in the Delaware is surrounded by larger players, the company isn’t interested in selling, Reger said.
“Our owner is a long-term investor. He wants to grow this business and hold this business for a long time,” he said. “There may be assets here and there where we look to do that, but generally we're looking to gain assets, not shed assets.”
The Delaware opportunity was a chance to obtain additional acreage and production from offset operators looking to get cash to invest in their own developments. It also realigns the firm’s resource blend.
Achieving balance
“We are much more balanced liquids to gas than we were a year ago, and the most recent acquisition is even more oily, so we are getting more liquids rich,” Reger said. “Having liquids and oil assets in our portfolio helps manage risk, so we're balanced in our approach.”
Jonah is interested in growth via M&A and is open to bolt-ons at any point.
“Our growth is coming in a couple of different phases, and the current phase of growth is more focused upon value add and scale for new basin entries,” Reger said. “Once we've established ourselves in a handful of basins, then I think we pivot our focus to bolt-ons and consolidating those positions. But it's a challenge to get acreage in the Delaware.
The Green River is already fairly well consolidated, so we're going to have to go to new basins, and figure out which ones those will be, where we can get good value, and then try and grow them from there.”
This summer, Jonah added a rig—its first in a couple of years—to the field in Wyoming.
The firm took the first six months of the year to evaluate whether to add a rig in the Jonah Field.
“Certainly the volatility in the market and the uncertainty there has made that decision challenging, looking at both commodity prices and well costs, particularly casing pipe. Every day the economics change pretty significantly, but we were comfortable enough to pull the trigger,” Reger said, adding that the firm expects to run the rig through the end of the year and perhaps during 2026.
Green River focus
The Tap Rock assets likely won’t be further developed near-term, but Jonah is looking at building its production in Wyoming.
“Right now, it’ll be focused on the Green River,” he said.
The Jonah Field development will consist of horizontals and verticals, he said. The plan is to drill seven wells initially through the end of the year. At that point, Jonah will evaluate whether to continue the drilling program.
Reger said the Tap Rock acquisition is well-developed, and most of the benches have been drilled, so there is less work to do in the Permian.
Both assets possess “great rock,” but the Green River asset grants access to West Coast markets for gas, “which really helps with the economics,” Reger said.
The verticals are needed to infill existing wells that are upward of 10 years old; the horizontal drilling is taking place on the edges of the field.
Jonah largely consolidated the Jonah Field itself in 2017 when the firm spent some $566 million to add Linn Energy assets to its footprint in the Green River Basin in Wyoming.
Today, the firm operates 100% of the wells in the Jonah Field, including the 500 wells Jonah has drilled, producing almost 2 Tcfe (trillion cubic feet equivalent). The company also holds a position in the Pinedale Anticline with authorization to develop another 3,500 wells in the 141,000 acres surrounding the Jonah Field.