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Eagle Rock to Pay $525M for Crow Creek Energy

Eagle Rock Energy Partners LP will purchase Tulsa-based CC Energy II, a portfolio company of Natural Gas Partners VIII LP that is also called Crow Creek Energy, for $525 million, the Houston-based partnership said Tuesday.

The deal includes approximately $303 million in Eagle Rock equity, $15 million of cash and $207 million of assumed debt. Closing is expected to occur May 3.

Crow Creek, which had net production of approximately 47 MMcfe/d in 1Q2011, has total proved reserves of 268 Bcfe (80% gas and 66% proved developed) in the Anadarko Basin, Arkoma Basin and Barnett Shale. Based on its anticipated drilling plans and the current natural gas price environment, Eagle Rock expects production from the acquired properties to total approximately 51 MMcfe/d this year and to increase through 2015.

"Crow Creek brings an extensive inventory of low-risk development prospects in established plays such as the Golden Trend Field and developing plays such as the Cana Shale," said Eagle Rock CEO Joseph A. Mills. Crow Creek's assets, which include 182 proved drilling locations and more than 450 probable drilling locations, will more than double Eagle Rock's current production and reserves, Mills said.

Assuming the deal closes as expected, Eagle Rock's capital budget for the rest of 2011 related to the Crow Creek properties is expected to be about $81 million.

Last year Eagle Rock expanded its footprint in the Granite Wash play with the purchase of gas gathering systems and related facilities in the Texas Panhandle from CenterPoint Energy Field Services Inc. for $27.5 million (see Daily GPI, Oct. 5, 2010).

Founded in 1988, Natural Gas Partners is an investment firm that specializes in the energy sector. The Natural Gas Partners platform consists of a series of nine private equity funds and related co-investment funds with cumulative commitments since inception of more than $7.2 billion, that invest in oil and gas property interests. The partnership is an affiliate of Irving, TX-based NGP Energy Capital Management.

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