HRG Group Inc. unit Compass Production Partners has agreed to sell its Holly, Waskom and Danville assets in East Texas and North Louisiana to Indigo Minerals LLC for $160 million in cash. The properties being sold include about 90,000 acres and produce about net 34 MMcfe/d, most of which is dry gas. The transaction is expected to close in the current fiscal quarter with an effective date of July 1, 2015. Proceeds are expected to be used to reduce borrowings outstanding under Compass' credit facility. "This transaction is reflective of the high quality nature of these assets and prospectivity of the Cotton Valley formation for horizontal exploitation," said HRG CEO Omar Asali. Indigo operates more than 750 wells and is a working interest owner in another 340-plus wells in East Texas and North and Central Louisiana. The company runs an active two- to four-rig development program and has drilled 100 Cotton Valley horizontal wells over the last four years, according to the company's website. Last year, EP Energy agreed to sell assets in the Ark-La-Tex Cotton Valley and South Louisiana Wilcox areas to Indigo Minerals for cash proceeds of $150 million (see Shale Daily, May 1, 2014).
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