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Indigo Minerals LLC announces planned acquisition of interests in 60 producing fields, 40,000 undeveloped acres and certain midstream assets located in the Ark-La-Tex from Chesapeake Energy Corporation for $218 Million
Indigo Minerals LLC announced that it has entered into a sale and purchase agreement to acquire producing properties, undeveloped acreage, and certain midstream assets located in the Ark-La-Tex region from Chesapeake Energy Corporation for a total consideration of $218 million. The transaction involves 519 producing wells in over 60 fields in north Louisiana, east Texas, and Arkansas along with 40,000 undeveloped acres, bringing the total acreage position involved in the transaction to over 122,000 net acres. Chesapeake will retain the deep (Haynesville shale and below) leasehold rights in the properties acquired. The midstream assets involve gathering systems directly associated with the Chesapeake operated producing fields. The all cash transaction has an effective date of March 1, 2009 and is scheduled to close on June 30, 2009.
The properties were producing approximately 26 net Mmcfe/d as of the effective date. Indigo will be taking over operations in 219 Chesapeake wells and will gain a working interest in another 300 non-operated wells in the region. The operated properties represent about 85% of the transaction value and Indigo plans to drill hundreds of development wells in the future within existing well units and on the largely contiguous 40,000 net undeveloped acres also being acquired.
This Indigo acquisition follows a successful divestment phase for the company in 2008/early 2009. Previous divestments involving various Haynesville shale mineral and leasehold positions have netted Indigo approximately $611 million in the past year. Despite the recent divestitures, Indigo remains one of the largest private mineral owners in Louisiana. Including its Alabama and Mississippi positions, the company still owns some 635,000 net fee mineral and royalty acres located primarily in the Upper Gulf Coast.
In addition to its minerals, pro forma the Chesapeake acquisition Indigo will own greater than 150,000 net leasehold acres in North Louisiana, East Texas, Alabama, and Arkansas. Through 2008 and year to date 2009, Indigo has drilled, or participated in drilling, 36 new wells with a 100% success rate and better than forecasted initial production volumes.
The combination of its existing working interest assets, large mineral position and the producing properties and leasehold to be acquired from Chesapeake will make Indigo one of the largest private E&P companies in the onshore Gulf Coast Region. Pro forma net production will approach 40 Mmcfe/d and total proved reserves will exceed 220 Bcfe.