Triad Hunter LLC, a subsidiary of Magnum Hunter Resources Corp., has closed on a $24.8 million acquisition of approximately 15,558 gross (12,186 net) acres in southeastern Ohio's Utica Shale from an undisclosed seller, the company said Friday.
Most of the leasehold acreage is located in Noble County, OH, according to Houston-based Magnum Hunter. The majority of the leasehold acreage is held by shallower production; the purchase includes all depths of 300 feet below the top of the Queenston Formation down to all further depths and there is no associated shallow production included with the acquisition.
The acreage is in close proximity to Triad Hunter's existing acreage position in Washington and Noble counties, and provides Triad Hunter approximately 18,187 gross (14,815 net) acres in the two counties, and a total of 23,214 gross (17,316 net) acres that are prospective for the Utica Shale.
"It is truly a win-win acquisition because it not only significantly expands our existing acreage position in a strategic region in Ohio at a very attractive price per acre, but also now provides the expansion opportunity for our midstream business, Eureka Hunter Pipeline, to immediately begin construction work into a region presently not served by other competitors, yet greatly controlled now by our upstream Appalachian Division," said Magnum Hunter CEO Gary Evans. "Given that nearly all the acreage is held by shallow production, this provides the company maximum flexibility in the development of the land."
A second closing on another block of similar acreage may occur by April 16 if the seller can satisfy certain title deficiency requirements, Magnum Hunter said.
Last month Evans said Magnum Hunter was striving to become a "drilling factory" (see Shale Daily, Jan. 6). The independent exploration and production company has interests in the Eagle Ford and Bakken, but its biggest play is in the Appalachian Basin, where it holds 370,000 acres. The company's leasehold is predominantly (75%) natural gas with the rest in oil and liquids. But in new areas in the Utica Shale and other unconventional plays, Magnum Hunter is focusing more on oil, liquids and condensate, Evans said.
Magnum Hunter closed out 4Q2011 producing 9,166 boe/d, up 455% from the end of 2010 and 74% from the third quarter (see Shale Daily, Jan. 31).