American Energy bags 130,000 more Utica acres

Aubrey McClendon's American Energy Partners LPis racking up holdings in the Utica shale.

American Energy-Utica LLC(AEU), an affiliate of American Energy Partners, has signed three agreements to acquire 130,000 net acres in the southern Utica shale play. McClendon founded both Oklahoma City-based companies and is their chairman and chief executive.

In late January, Hess Corp. (NYSE: HES) announced the sale of 74,000 acres in the Utica for $924 million to an undisclosed buyer. Charlie Rexford, a spokesman for American Energy, confirmed it was the purchaser, according to Bloomberg.

American Energy acquired the remaining 56,000 net acres from Exxon-Mobil Corp. (NYSE: XOM) and privately held Paloma Partners LLC. The purchase prices were not disclosed.

American Energy now is the leading acreage-holder in the Utica with 260,000 net acres. The company plans to drill 2,700 gross wells and 1,600 net wells there during the next decade.

About 90% of its holdings are in the core of the play, defined as southern Jefferson, Belmont, eastern Guernsey, Harrison, Monroe and Noble counties.

The acquisitions come after another American Energy affiliate's recent announcement of a $500-million equity raise for onshore basin deals.

American Energy's lead equity investor is Houston-based The Energy & Minerals Group(EMG). Additional equity was provided by First Reserve Corp., AEU management and others. EMG manages a family of funds that invests in the energy and minerals sectors and has more than $8.4 billion of assets under management.

Aurora sells Eagle Ford acreage for $2.35 billion

Eagle Ford-focused Aurora Oil & Gas Ltd. (ASE: AUT) has agreed to sell the company to Calgary's Baytex Energy Corp. (NYSE: BTE) for $2.35 billion, including assumption of C$744 million in debt.

Australia's Aurora has been focused on the Eagle Ford's Sugarkane Field, which is 97% held by production. The company is developing 22,100 largely contiguous net acres there, and in the third quarter of 2013 drilled 10 new net wells. The company's acreage is in Karnes, Atascosa and Live Oak counties, Texas.

The deal requires Aurora's shareholder approval, court consent and approval by US and Australian regulatory officials.

Baytex, a mid-cap Canadian company, will pay about $50,000 per acre after adjusting for net 22,500 bbl. of oil equivalent per day (BOE/d). Aurora primarily relies on Marathon Oil Corp. to operate its holdings.

Aurora's fourth-quarter 2013 gross production was 24,678 BOE/d (82% liquids), predominantly light, high-quality crude oil.

ExxonMobil's XTO ups Permian holdings

Exxon Mobil Corp. (NYSE: XOM) announced additions to its US oil and natural gas portfolio managed by its subsidiary, XTO Energy Inc., through separate agreements in the Permian Basin in Texas and in Ohio's Utica shale.

Through a deal with Endeavor Energy Resources LP, XTO will fund development to gain substantial operating equity in some 34,000 gross acres in the liquids-rich Wolfcamp formation in Midland and Upton counties, Texas. Endeavor will continue to operate shallow production while XTO will drill and operate horizontal wells in the deeper intervals.

The agreement increases XTO's holdings in the Permian Basin to more than 1.5 million net acres.

XTO is based in Fort Worth, Texas. Endeavor is based in Midland, Texas.

Vanguard closes Wyoming acquisition

Vanguard Natural Resources LLC(Nasdaq: VNR) completed its acquisition of natural gas and oil properties in Pinedale and Jonah fields, in southwest Wyoming, for an adjusted purchase price of $549.1 million.

Houston's Vanguard gains via the deal about 87,000 gross acres (14,000 net) that produce roughly 113.4 million cu. ft. equivalent per day (MMcfe/d), 80% natural gas, 4% oil and 16% natural gas liquids (NGLs).

The seller was not disclosed but was rumored to be Anadarko Petroleum Corp. (NYSE: APC).

Liberty Resources II dives back into the Bakken

Liberty Resources II LLC, Denver, has agreed to acquire oil and gas assets in North Dakota's Williston Basin for $455 million. The properties comprise some 53,000 net acres in Williams, Divide, Burke and McKenzie counties and more than 4,000 BOE/d of production from the Bakken and Three Forks formations, which Liberty II will continue to target. The transaction represents the first acquisition by Liberty II since it announced in November 2013 a $350-million equity commitment from funds managed by energy private-equity firm Riverstone Holdings LLC, including Riverstone Global Energy and Power Fund V and Riverstone Energy Ltd., management and other investors.

Riverstone and Liberty II management previously partnered successfully in Liberty Resources LLC, an oil and gas company focused on the Bakken. Over the course of two years and through 13 discrete proprietary acquisitions, Liberty established a land position of approximately 43,000 net acres and drilled and completed 29 operated wells in the Bakken and Three Forks formations, ultimately achieving more than 6,000 BOE/d of net production. Liberty realized industry-leading recovery rates in the Bakken due to its application of unique and proprietary completion designs. The majority of Liberty's assets were sold to Kodiak Oil & Gasin July 2013 for about $680 million.

Similar to the strategy employed by Liberty in the Bakken shale, Liberty II will apply its management team's expertise in well completion design and execution to the development of the newly acquired Bakken properties, which are proven but largely undeveloped.

Oasis to sell certain Sanish assets

Oasis Petroleum Inc. (NYSE: OAS), Houston, agreed to sell certain nonoperated properties in its Sanish operating area and certain other nonoperated leases adjacent to the Sanish position in the Bakken shale to an undisclosed buyer for approximately $333 million in cash.

As of Dec. 31, 2013, the properties consisted of 8,354 net acres with production of some 2,691 BOE/d during the fourth quarter.

FourPoint Energy acquires EnerVest's Anadarko assets

Denver-based FourPoint Energy LLChas acquired producing and undeveloped oil and gas properties and related midstream assets in the Western Anadarko Basin from affiliates of EnerVest Ltd. Under terms of the agreement, FourPoint Energy has purchased for $268 million an ownership stake in both the Laredo Petroleum and SM Energy acquisitions closed by EnerVest in second-half 2013. The acquisition includes interest in more than 1,200 producing wells with net production to FourPoint Energy of more than 35 MMcfe/d.

FourPoint Energy and Houston-based EnerVest have also entered into a joint development and area of mutual interest agreement to own, operate and develop oil and gas properties in the Western Anadarko Basin. Each company will hold a 50% interest in the AMI with EnerVest designated as operator. The companies hold more than 90,000 net acres and will share all future lease and producing property acquisitions within the joint development area, encompassing 14 counties in Texas and Oklahoma.

This will be the first entry back into the Western Anadarko Basin for FourPoint Energy since the sale of the management's previous company, Cordillera Energy Partners, to Apache Corp. (NYSE: APA) in 2012.

Simultaneous with the EnerVest transactions, FourPoint Energy raised more than $1 billion of committed capital including $200 million in direct private equity and $800 million in term debt from EIG Global Energy Partners LLCand funds advised by GSO Capital Partners LP. In addition, Four-Point Energy entered into a $250-million credit facility with JPMorgan Chase Bank NAand Wells Fargo Bank NA.

Jefferies LLCwas sole financial advisor, JPMorgan Securities LLC was sole lead arranger and book-runner on the credit facility and Andrews Kurth LLP was legal advisor to FourPoint.

Additional news

Oklahoma City-based Chesapeake Energy Corp. (NYSE: CHK) completed the sale of 100% of its ownership interest in Chaparral Energy Inc., also based in Oklahoma City. The transaction closed on January 13, 2014, for gross proceeds of $215 million.

Penn Virginia Corp. (NYSE: PVA) closed the sale of substantially all of its natural gas midstream assets in the Eagle Ford to American Midstream Partners LP (NYSE: AMID) for $100 million in cash.

The Radnor, Pa., company sold a natural gas gathering and gas lift system, including some 119 miles of pipelines and associated facilities located in Gonzales and Lavaca counties, Texas.

Proceeds will be used to fund its 2014 capital expenditures plan. Acquest Advisors LLCwas Penn Virginia's financial advisor.

Separately, Penn Virginia retained Scotia Waterous (USA) Inc. as its exclusive financial and technical advisor in the potential sale of its Midcontinent and Mississippi (Selma Chalk) assets. The assets include proved reserves of 26 million BOE and daily production of 4,200 BOE.

Tall Oak Midstream LLC, Oklahoma City, has received an initial equity commitment of up to $100 million from EnCap Flatrock Midstream, San Antonio, a private-equity firm. “We are excited to be partnering with EnCap Flatrock and look forward to working together to build an innovative midstream company. Tall Oak has had a great response from the Oklahoma oil and gas community,” says Tall Oak's president and chief executive, Ryan Lewellyn.

Dennis Jaggi, a managing partner at EnCap Flatrockand a member of Tall Oak's board of directors, said, “Our initial equity commitment to Tall Oak reflects our confidence in Ryan and the outstanding quality of the management team he has assembled. They have a customer-driven approach and experience with significant midstream assets located in complex resource plays. We look forward to supporting Tall Oak's growth.”

Tall Oak Midstream was formed early this year and is led by four founding partners—Lewellyn; chief commercial officer Carlos P. Evans; chief financial officer Max J. Myers; and chief operating officer Lindel R. Larison.

Paul Hastings LLPwas lead legal counsel for Tall Oak, and Thompson & Knight LLP represented EnCap Flatrock Midstream.

Post Oak Energy Capitalclosed its second fund, Post Oak Energy Partners II, with $600 million in commitments. The fund was closed at a hard cap of $500 million in a single closing, and Post Oak Energy Capital's existing funds were increased by $100 million. It will co-invest alongside Post Oak Energy Partners II.

“We are pleased that our strategy and team have the support of some of the most experienced private energy investors in the world,” says Frost Cochran, managing director of Post Oak Energy Capital.

Like the first fund, Post Oak Energy Partners LP, this most recent fund will invest in North American oil and gas companies, oilfield services and infrastructure.

Post Oak Energy Capital, established in 2006, is based in Houston.

Pyramid Oil Co. (NYSE: PDO) and privately held Yuma Energy Inc. have agreed to merge in an all-stock transaction. Upon completion of the merger, Pyramid will change its name to Yuma Energy Inc. and relocate its headquarters to Houston, while maintaining offices in Bakersfield, Calif., to oversee its operations in that state.

Pyramid's E&P operations are focused primarily on fields in Kern County. It is also involved in a joint venture targeting the Eagle Ford in Texas.

Yuma focuses on exploration and development of conventional and unconventional prospects in the US Gulf Coast region. It additionally has a non-operated position in the Bakken shale in North Dakota.

As of Dec. 31, 2013, Yuma had 80,000 net acres of oil and gas leasehold. It is currently producing 2,850 BOE/d.

People news

James Palmresigned in mid-February as chief executive officer of Gulfport Energy Corp., Oklahoma City. He also resigned from the company's board of directors. Michael Moore, president and chief financial officer, will be interim chief executive while Gulfport fills Palm's vacancy, the company said. Over Palm's eight years of leadership, Gulfport grew from an over-the-counter trader to a NasdaqGS trader with a market capitalization near $5 billion. And the company transformed from a southern Louisiana pure play to having substantial assets in the Utica shale, as well as interests in the Permian Basin and Canadian oil sands.

Houston-based Memorial Production Partners LPappointed William J. Scarff president of the company's general partner. Scarff has served as president and chief executive of several private E&P companies since 1999, including Propel Energy LLC. He has also worked for Marathon Oil Co., Anadarko Petroleum Co. and Burlington Resources.

Jones Energy Inc. appointed David Cape as its vice president of land and business development. Prior to joining Jones Energy, Cape was vice president of land for Cypress E&P Corp., a privately held company working in the Eagle Ford. Cape also worked in land management for Santos USA Corp., the national subsidiary of the Australian multinational company Santos Ltd., Sonat Exploration Co. and TXO Production Corp.

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