Attached files
| file | filename |
|---|---|
| 8-K - Harvest Oil & Gas Corp. | v200367_8k.htm |
| EX-2.1 - Harvest Oil & Gas Corp. | v200367_ex2-1.htm |
EV
Energy Partners to Acquire Barnett Shale Oil and Gas Properties
HOUSTON,
TX, Oct 26, 2010 (MARKETWIRE via COMTEX News Network) — EV Energy Partners, L.P.
(NASDAQ: EVEP) today 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:
|
—
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212
active wells
|
|
—
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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
|
|
—
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40
percent proved developed (130.6
BCFE)
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—
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71
percent natural gas, 29 percent natural gas
liquids
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—
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Current
net daily production of approximately 27
MMCFE
|
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—
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Reserves-to-production
ratio of 33 years
|
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—
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98
percent operated
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—
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295
identified proved undeveloped drilling
locations
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—
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Over
100 identified refrac opportunities
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—
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Approximately
20,207 gross acres (6,110 net to EVEP's interest), with over 99 percent
held by production
|
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—
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3-D
seismic across all acquired acreage
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EVEP is
also acquiring oil and natural gas commodity price hedges related to the
properties as follows:
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Swap
|
Collar
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Wtd.
Avg.
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Wtd.
Avg.
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|||||||||||||||||
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Volume
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Swap
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Volume
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Collar
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Collar
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||||||||||||||||
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(Mmmbtu/Mbbls)
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Price
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(Mmmbtu/Mbbls)
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Floor
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Ceiling
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||||||||||||||||
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Natural
Gas
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||||||||||||||||||||
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2011
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||||||||||||||||||||
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NYMEX
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1,472 | $ | 6.152 | |||||||||||||||||
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NYMEX
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793 | $ | 6.00 | $ | 6.75 | |||||||||||||||
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NGPL
TX/OK
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1,019 | $ | 5.75 | $ | 6.58 | |||||||||||||||
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2012
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||||||||||||||||||||
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NYMEX
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341 | $ | 6.25 | $ | 8.125 | |||||||||||||||
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NYMEX
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1,703 | $ | 6.22 | $ | 6.70 | |||||||||||||||
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Crude
Oil
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||||||||||||||||||||
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(NYMEX)
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||||||||||||||||||||
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2011
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34.0 | $ | 88.00 | |||||||||||||||||
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2011
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67.9 | $ | 80.00 | $ | 95.33 | |||||||||||||||
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2012
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90.8 | $ | 82.50 | $ | 100.00 | |||||||||||||||
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."
For 2011,
EVEP expects the following for the properties to be acquired:
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FY
2011
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Net
Production:
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|||||||||
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Natural
Gas (MMcf)
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6,850
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- |
7,725
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Crude
Oil (MBbls)
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3.4
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- |
4.1
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||||||
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Natural
Gas Liquids (MBbls)
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505
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- |
590
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Total
MMcfe
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9,900
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- |
11,290
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-
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|||||||||
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Average
Daily Production (MMcfe/d)
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27.1
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- |
30.9
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Average
Price Differential vs NYMEX
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|||||||||
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Natural
Gas (% of NYMEX Natural Gas)
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75%
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- |
81%
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||||||
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Crude
Oil (% of NYMEX Crude Oil)
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93%
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- |
99%
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||||||
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Natural
Gas Liquids (% of NYMEX Crude Oil)
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37%
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- |
43%
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Expenses:
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|||||||||
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Operating
Expenses:
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|||||||||
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LOE
and other ($ thous)
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$5,700
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- |
$6,450
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||||||
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Production
Taxes (as % of revenue)
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1.75%
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- |
1.80%
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||||||
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Incremental
annual general and administrative expense ($ thous)
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$550
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- |
$600
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||||||
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Capital
Expenditures ($ thous)
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$20,000
|
- |
$29,000
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||||||
EVEP
expects production from this acquisition to increase for several years beyond
2011 as its development drilling program progresses.
EVEP and
EnerVest, Ltd. were advised by Griffis & Small, LLC.
Conference
Call
EVEP will
host a conference call to discuss this transaction on Oct. 27, 2010 at 9:00 am
CST. Investors interested in participating in the call may dial (480) 629-9770
and ask for the EV Energy Partners call at least 5 minutes prior to the start
time, or may listen live over the internet through the Investor Relations
section of the EVEP website at http://www.evenergypartners.com.
A replay of the call will be available approximately two hours following the
event and will remain available until Friday Nov. 5, 2010.
EV Energy
Partners, L.P., is a master limited partnership engaged in acquiring, producing
and developing oil and natural gas properties. More information about EVEP is
available on the internet at www.evenergypartners.com.
(code #:
EVEP/G)
This
press release may include "forward-looking statements" as defined by the
Securities and Exchange Commission. All statements, other than statements of
historical facts, included in this press release that address activities, events
or developments that the partnership expects, believes or anticipates will or
may occur in the future are forward-looking statements. These statements are
based on certain assumptions made by the partnership based on its experience and
perception of historical trends, current conditions, expected future
developments and other factors it believes are appropriate in the circumstances.
Such statements are subject to a number of assumptions, risks and uncertainties,
many of which are beyond the control of the partnership, which may cause our
actual results to differ materially from those implied or expressed by the
forward-looking statements. These include risks relating to financial
performance and results, availability of sufficient cash flow to pay
distributions and execute our business plan, prices and demand for natural gas
and oil, our ability to replace reserves and efficiently develop our current
reserves and other important factors that could cause actual results to differ
materially from those projected as described in the Company's reports filed with
the Securities and Exchange Commission available from us at www.evenergypartners.com
or from the Securities and Exchange Commission at www.sec.gov. In
filings with the SEC, we are required to report proved reserves as defined in
Regulation S-X under the Securities Act. In general, Regulation S-X requires
that in calculating proved reserves we use the unweighted average of the price
of crude oil and natural gas on the first day of each month for the twelve
months prior to the date of the report, without escalation. The reserves
described above in this press release were calculated using forward strip
prices. The estimated net proved reserves attributable to the properties being
acquired by the partnership using the unweighted average prices for the twelve
months ended September 30, 2010 of $4.58 per MMBTU of natural gas and $77.82 per
barrel of crude oil and as required by Regulation S-X are 316 BCFE.
EV Energy
Partners, L.P.
Michael
E. Mercer
713-651-1144
Web site:
http://www.evenergypartners.com
SOURCE:
EV Energy Partners, L.P.
http://www.evenergypartners.com
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