Diamondback Energy
Midland Basin
May 6, 2015 |
Emerald Oil
Delaware Basin
May 11, 2015 |
Rex/ArcLight JV
Marcellus
May 6, 2015 |
Gulfport Energy
Utica
May 6, 2015 |
Diamondback Energy is delivering high returns and expecting 60% IRR at $60 oil. As the slide above shows, FANG is continuing its strong growth and recently bought 11,948 net acres in the core of the northern Midland basin for $438 million. Located mainly in Howard County, the deal brings acreage which, based on wells in the immediate proximity, rank within the top quartile of FANG’s portfolio. Three horizontal zones have been de-risked including the Wolfcamp A and B and the Lower Spraberry. Some of the purchase price will be offset with an offer out to VNOM for $33.7 million for a 1.5% GORR on the acreage. This slide shows the compelling accretive nature of the deal to FANG’s inventory as well as attractive costs of $23,845 per acre and $2.05 per resource boe. |
Emerald Oil announced on May 11 a deal to buy 10,746 net acres in Lea and Eddy counties, New Mexico for $75 million. According to EOX, the deal was internally sourced and equates to a purchase price of $7,000 per acre. EOX believes the assets bring more than 400 potential locations targeting multi-stacked, oil-weighted pay. This slide shows the great neighborhood around the acreage which lies in the core of the Delaware Basin. EOX has identified its targeted buy area and through science and well results to date believes the Delaware Basin is at an inflection. Backing up this claim is data showing upward EUR improvement in which the Bone Spring/Wolfcamp zones in the northern Delaware Basin generate similar EURs as the more mature Wolfcamp zone in the northern Midland Basin. |
Rex Energy partnered with private equity company ArcLight Capital to form a JV in its core Marcellus Butler Area in southwest Pennsylvania. The JVA allows the partners to develop 32 designated wells with ArcLight participating by funding 35%. The wells are evenly split between REXX’s Butler legacy are and its Moraine East area. In the Moraine East area, for each well drilled (D&C of $3.7 million) reserve adds total 20.7 Bcfe (8.8 Bcfe of the well plus 11.9 Bcfe of PUDs) The value of the JV to Rexx is $67 million. Also, ArcLight’s 35% WI will revert to 17.5% upon certain IRR and ROI thresholds on groups of wells. ArcLight gets an option to participate in 17 more Moraine East wells in 2016 at a 20% WI. This final slide shows REXX’s next moves in the JV and divesture arena. |
Gulfport Resources expanded on its strong Utica performance in 2014 with a $301 MM corporate cash buy of privately-held Paloma Partners III announced April 15. The deal brings 24,000 net acres at a price of $12,700/acre. Located in Belmont and Jefferson counties, Ohio just to the east of GPOR’s existing Utica dry gas position, the deal adds 150 more Utica locations based on 160 acre spacing. Ohio’s Utica shale has been the backbone of GPOR’s growth and it now is producing 396 MMcfe/d or 93% of GPORs overall production. With a strong balance sheet, GPOR was guiding towards a 2015 exit rate of between 432 and 480 MMcfe/d before acquiring Paloma. After Paloma, GPOR now owns 208,000 net Utica acres with 907 Bcfe proved reserves. |
