Memorial Production Partners LP (MEMP) said it has signed an agreement to purchase oil producing assets in south central Wyoming from an undisclosed seller for $935 million.
In a statement Monday, Houston-based MEMP said it plans to acquire approximately 6,800 gross (6,800 net) acres — including 140 producing wells and 166 injection wells — in two fields of the Bairoil Complex, which is located in Wyoming’s Carbon and Sweetwater counties. MEMP said the acquired acreage began tertiary recovery using carbon dioxide (CO2) flooding in the late 1980s.
MEMP — a publicly traded upstream master limited partnership with operations in the Permian Basin, Rockies, East Texas/North Louisiana and the Eagle Ford Shale/South Texas — said the Bairoil Complex properties are 100% operated, with an average working interest and net revenue interest of 100% and 88%, respectively. The transaction has an effective date of April 1 and is expected to close during the third quarter.
“These assets complement our existing portfolio due to their very shallow decline rate, low operating cost structure and low maintenance capital requirements,” said John Weinzierl, CEO of MEMP’s general partner, Memorial Resource Development Corp (MRD). “The contiguous nature of the acreage, contracted CO2 supply and robust infrastructure enhances our ability to operate the properties.
“Given the long-life nature of these assets and the significant remaining oil in place, we expect these assets to create long-term value for our unitholders.”
MEMP said the acquisition holds estimated proved reserves of approximately 83 million bbl, of which 59% is classified as proved developed. Estimated current net production is approximately 5,900 b/d, with 81% weighted toward oil and the remaining 19% natural gas liquids. As of Dec. 31, 2013, the partnership’s total proved reserves were 1,075 Bcfe.
The company revised its adjusted earnings before interest, taxes, depreciation and amortization guidance range for full-year 2014 to $355-375 million, up from a previously announced range of $303-311 million.
On March 25, MEMP announced that it had acquired about 15,200 gross (800 net) acres in Karnes County, TX, in the Eagle Ford, from Alta Mesa Holdings LP for $173 million. It acquired oil and gas properties in the Permian, East Texas and the Rockies from MRD and affiliates of Natural Gas Partners for $606 million in July 2013, and oil and gas properties in Rusk County, TX, from Goodrich Petroleum Corp. for $95 million in September 2012 (see Shale Daily, July 16, 2013; Sept. 25, 2012).
Last month, MRD filed for an initial public offering of up to $700 million with the U.S. Securities and Exchange Commission (see Shale Daily, April 7).
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