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Fleur de Lis, KKR Targeting EOR With Anadarko Purchase

Fleur de Lis Energy (FDL) and financial partner KKR have purchased Powder River and Green River basin properties in Wyoming from Anadarko Petroleum Corp. that are to be used for enhanced oil recovery (EOR) activities.

The assets, purchased for an undisclosed amount, include the Salt Creek, Monell and Linch fields, which together are producing about 14,000 boe/d net. The transaction also included the Howell Pipeline, with carbon dioxide transportation capacity of 270 MMcf/d.

"The FDL team has a deep history and significant experience acquiring and operating similar, high-quality oilfields under tertiary recovery," said CEO Porter Trimble. "These fields have over 2 billion bbl of original oil in place, with only a portion of that recovered to date. These are exactly the type of long-lived oil assets we look to own and operate."

Trimble formerly was vice chairman of Merit Energy Co. KKR and the privately held producer now have completed three U.S. onshore acquisitions since they partnered in 2014. The operator currently manages 7,400 boe/d of production, with natural gas assets in southern Mississippi and oil properties in the Permian Basin of Texas.

Last July FDL paid more than $73 million to acquire properties in the gas-rich Selma Chalk from Penn Virginia Corp., which at the time were producing about 11.9 MMcfe/d (see Shale Daily, Aug. 26, 2014; June 2, 2014). In November, FDL completed a $350 million purchase of Wolfberry formation assets in the Permian from Linn Energy LLC (see Shale Daily, Oct. 3, 2014). The Permian properties included 7,200 net acres, 4,600 boe/d and an estimated 19 million boe of proved reserves as of year-end 2013.

KKR member Jonathan Smidt said today was a "very interesting time in the cycle to be acquiring long-lived, producing oil assets." He said Trimble and his team have a "track record of creating value with mature tertiary recovery projects by finding opportunities to enhance performance."

FDL, headquartered in Dallas, has more than $1 billion of available capital to purchase North American oil and gas assets, KKR said.

Frost & Sullivan consultants in March said that by 2025, about 50% of the oil produced in the United States is expected to be recovered through some form of EOR (see Shale Daily, March 6). EOR currently is estimated to account for about 7.5% of total domestic crude output. By 2020, F&S forecast that the EOR market would grow at a compound annual rate of 22.4% to reach about $70.4 billion.

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