GE Commercial Finance Energy Financial Services (EFS) and privately held Locin Oil Corp. have acquired 96 Bcf of net proved gas reserves for $147 million from Equitable Production Co. The assets include 1,200 wells in Pennsylvania and Ohio, and more than 220 proven and probable undeveloped drilling locations have been identified.
EFS holds a 95% limited partnership interest in NCL Appalachian Partners LP, which was formed by The Woodlands, TX-based Locin Oil. EFS will share in capital expenditures to develop the reserves, while Locin, a 5% stakeholder in NCL, will operate the fields.
Besides the reserves, the acquisition includes more than 400 miles of related gathering systems in the Noble (Lordstown) and Cambridge fields in eastern Ohio and the Snowshoe and Grugan fields in Central Pennsylvania. The Ohio gas production is sold to contracted industrial customers in the region, while the Pennsylvania production is sold through multiple sales points to four major gas pipelines.
"Our partnership with Locin represents a dynamic growth opportunity in this geographically strategic, energy-rich region," said EFS Managing Director John Schaeffer. He also runs the EFS Oil and Gas unit. "Locin's industry experience, combined with GE's financial resources and industry knowledge, positions our new partnership for continued, long-term success."
EFS has a long record of developing energy-related projects in North America. In 1999, EnverVest Appalachia LP, a limited partnership formed by EFS and EnverVest Management Co., purchased the Appalachian Basin reserves of Cabot Corp. It also has participated in other oil and gas acquisitions in North America through limited partnerships that include Apache Capital-I LP, CEI Bristol Acquisition LP and Clayton Williams Acquisition LP.
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