GE Energy Financial Services and an affiliate of Vess Oil Corp. are buying about 13,000 net acres in East Texas and associated production from the Woodbine formation from an EnerVest Ltd. affiliate for $108 million.
The assets are about 20 miles northeast of College Station in Brazos, Madison and Grimes counties, and the target zones are the existing Woodbine and prospective Eagle Ford formations. This is the third partnership with Wichita, KS-based Vess for the energy financial services unit of GE.
This time around, GE Energy Financial Services invested $77 million for a majority stake and limited partner role, with a Vess Oil affiliate acquiring the remaining interest and serving as general partner and operator. Additional financial details were not disclosed.
The companies partnered previously to acquire reserves in Brazos County as well as in Kansas. A separate Vess Oil affiliate is developing Woodbine reserves in the Kurten Field, adjacent to the newly acquired assets. The new partnership is conducting drilling and completion operations on its first and second Woodbine wells as part of a multi-year continuous drilling program.
"Our partnership with GE accomplishes our strategic objective of expanding our operations in Brazos County and provides a platform for growth through bolt-on acquisitions in this area," said Vess Oil Corp. CEO Barry Hill.
Founded in 1979, Vess Oil has operated oil and natural gas properties in Kansas for more than 30 years. According to the Kansas Geological Survey, the company was the fourth-largest operator of oil properties in the state measured by production during 2012. Vess is also active in Montana and Oklahoma.
Since 1991, GE Energy Financial Services has provided more than $4 billion in partnership equity for its independent private and public oil and gas partners-operators in the United States. It is active in all major onshore basins and in the shallow water Gulf of Mexico with partnership investments that own interests in more than 3,000 wells producing an estimated 26,000 boe/d.