Eagle Energy Acquisitions LP, the operating subsidiary of Eagle Energy Trust, Calgary, (Toronto: EGL.UN) has completed its purvchase of producing petroleum properties in the Texas Permian Basin from an undisclosed seller for US$113.4 million.
The reserves are valued at US$14 per proved barrel equivalent and US$11.09 per proved and probable barrel equivalent, according to Eagle Energy.
The deal includes 92.5% working interest in 3,175 gross (2,937 net) acres near Midland, with working interest in 31 gross (28.4 net) producing wells and three gross (2.76 net) nonproducing wells and one gross (0.92 net) salt water disposal well. The Assets will be 100% operated by Eagle following a short transition period from the current operator.
Eagle has also agreed to purchase the seller's remaining 7.5% working interest in the properties within 12 months at fair market value. The seller is restricted from, indirectly or directly, soliciting, negotiating or taking any other actions or steps in respect of a sale or possible sale of the remaining interest to any third party prior to April 30, 2013.
Eagle previously acquired a 73% working interest in the Salt Flat Field, a producing light oil field in south central Texas, in November 2010.
Current working interest production is approximately 600 barrels of oil equivalent per day, which Eagle anticipates it will increase to approximately 1,000 barrels equivalent per day by year end. Estimated proved reserves as of March 31 were approximately 8.1 million barrels equivalent and proved and probable reserves were 10.2 million barrels equivalent (88% oil and gas liquids).
The properties feature a development inventory of approximately 90 locations.
Eagle Energy president and chief executive Richard Clark says, “This acquisition further demonstrates Eagle's ability to successfully transact in the United States, adding a second, high netback, cash flow producing asset, with a large amount of low risk drilling remaining. The acquired assets maintain Eagle's focus on oil production and enhance the long-term sustainability of Eagle's asset base. These long-life, high netback assets represent a solid, low risk entry-point for Eagle into one of the most prolific and well-established oil weighted basins in North America.”
Evercore Group LLC, an affiliate of Evercore Partners, was exclusive financial advisor to Eagle.