Houston-based Riviera Resources LLC has inked a deal to sell its remaining assets in the Hugoton Basin to an undisclosed buyer, marking an exit from the Kansas formation and a narrowing focus to areas of the Lower 48.
For a price tag of $295 million, Riviera plans to sell roughly 4,000 wells that had net output of 104 MMcfe/d in the second quarter, as well as natural gas processing plants in Grant County, KS, including the 450 MMcf/d Jayhawk processing plant and the currently inactive Satanta processing plant. The Jayhawk plant is currently delivering volumes of roughly 260 MMcf/d.
CEO David Rottino said the sale would complete the company’s exit from the Hugoton.
“Over the last six months we have strategically monetized our Hugoton Basin properties for over $405 million total through a series of three transactions,” he said. “Accomplishing a complete regional exit through these transactions not only highlights the value of our assets, but our capability to resourcefully maximize value given the current market environment.”
Riviera became an independent producer following its spinoff from Linn Energy Inc. last year.
In April it announced a $31 million deal to sell its interest in about 2,300 nonoperated wells with proved developed reserves of about 74 Bcfe, also in the Hugoton.
In March, Riviera finalized an agreement to sell is volumetric production payment interest in helium produced from some wells in the Hugoton for $82 million.
With Hugoton out of the picture, Riviera’s operations now include assets in East Texas, North Louisiana, as well as the Anadarko and Uinta basins, along with Blue Mountain Midstream LLC.
In July, Blue Mountain announced a planned 50-mile crude gathering line in Oklahoma’s Anadarko and an anchor-shipper in exploration and production company Roan Resources LLC.
The Hugoton deal is expected to close by the end of the year.
How the company will use proceeds from the sale is yet to be determined by the board, but it could go toward a one-time cash distribution to shareholders, the company said.