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EVEP Replaces Dry Gas Barnett With More Eagle Ford Crude Production

EV Energy Partners LP (EVEP) has divested 16% of its Barnett Shale position and replaced it with a 5.8% working interest in the Eagle Ford Shale.

The company announced Wednesday that it divested the Barnett assets in a deal that closed in December for $52.1 million. Those proceeds were put into a tax-advantaged account and then flipped to help fund the $58.7 million Eagle Ford acquisition, which closed last month and bolstered the company’s existing position in the play. The remaining $6.6 million was drawn from the company's revolving credit facility, and the exchange account helped the company avoid a tax liability on the Barnett sale.

The Eagle Ford assets, located in Karnes County, TX, are currently producing 1,000 boe/d and are prospective for the Austin Chalk formation. Estimated proved reserves are 6.4 million boe.The assets include more than 200 drilling locations.

EVEP sponsor EnerVest Ltd. owns the remaining 87% working interest in the properties and operates them. EVEP said it bought the stake from an undisclosed third party and did not disclose the Barnett buyer.

The Barnett divestiture, EVEP said, included estimated proved reserves of 94.6 Bcf of dry gas and 13 MMcf/d of production. The company said the Eagle Ford acquisition would increase its crude production by 25% this year.

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