HOUSTON, TX, Oct 2010 (MARKETWIRE via COMTEX News Network) -- EV Energy Partners, L.P. (NASDAQ: EVEP) announced it, along with certain institutional partnerships managed by EnerVest, Ltd., has signed an agreement to acquire oil and natural gas properties, including certain related commodity price hedges, located in the Barnett Shale from Talon Oil & Gas LLC. EVEP will acquire a 31 percent interest in these assets for $300 million.
The acquisition, which has been approved by the Board of Directors, is expected to close by the end of December 2010 and is subject to customary closing conditions and purchase price adjustments.
The acquisition is comprised of wells producing primarily in the core of the Barnett Shale, and 29 percent of production is natural gas liquids.
The properties, and EVEP's share of reserves and production, include:
-- 212 active wells
-- Estimated proved reserves as of Oct. 1, 2010, net to EVEP (based on recent strip prices) of approximately 328.5 BCFE, plus additional unproved potential
-- 40 percent proved developed (130.6 BCFE)
-- 71 percent natural gas, 29 percent natural gas liquids
-- Current net daily production of approximately 27 MMCFE
-- Reserves-to-production ratio of 33 years
-- 98 percent operated
-- 295 identified proved undeveloped drilling locations
-- Over 100 identified refrac opportunities
-- Approximately 20,207 gross acres (6,110 net to EVEP's interest), with over 99 percent held by production
-- 3-D seismic across all acquired acreage
In addition, EVEP intends to enter into arrangements for additional commodity price hedges at or prior to closing.
EVEP plans initially to finance the acquisition with borrowings under its existing credit facility.
"We are excited to add the Barnett Shale as a core operating area, joining Ohio, the Austin Chalk and the San Juan Basin," said John B. Walker, Chairman and CEO of the partnership. "These assets have been derisked and we expect the results of our capital spending program will be reliable, predictable and offer a very good rate of return. This acquisition, which we expect to be accretive to distributable cash flow per unit, provides a good base of production in one of North America's most prolific natural gas basins. In addition, these assets provide growth through a significant inventory of low risk development opportunities."
EVEP expects production from this acquisition to increase for several years beyond 2011 as its development drilling program progresses.
Recommended Reading
Matador Stock Offering to Pay for New Permian A&D—Analyst
2024-03-26 - Matador Resources is offering more than 5 million shares of stock for proceeds of $347 million to pay for newly disclosed transactions in Texas and New Mexico.
Kimmeridge Fast Forwards on SilverBow with Takeover Bid
2024-03-13 - Investment firm Kimmeridge Energy Management, which first asked for additional SilverBow Resources board seats, has followed up with a buyout offer. A deal would make a nearly 1 Bcfe/d Eagle Ford pureplay.
Laredo Oil Subsidiary, Erehwon Enter Into Drilling Agreement with Texakoma
2024-03-14 - The agreement with Lustre Oil and Erehwon Oil & Gas would allow Texakoma to participate in the development of 7,375 net acres of mineral rights in Valley County, Montana.
SLB’s ChampionX Acquisition Key to Production Recovery Market
2024-04-21 - During a quarterly earnings call, SLB CEO Olivier Le Peuch highlighted the production recovery market as a key part of the company’s growth strategy.
From Restructuring to Reinvention, Weatherford Upbeat on Upcycle
2024-02-11 - Weatherford CEO Girish Saligram charts course for growth as the company looks to enter the third year of what appears to be a long upcycle.