Memorial Production Partners LP (Nasdaq:MEMP) announced that it has signed a definitive agreement to acquire certain oil and natural gas properties in East Texas from Goodrich Petroleum Corp. for a purchase price of $95 million, subject to customary purchase price adjustments.
The transaction is expected to close on or about Sept. 28, subject to customary approvals and closing conditions, and will be financed with borrowings under MEMP's existing credit facility.
These properties are located in the South Henderson field of Rusk county, Texas.
The acquisition is expected to be immediately accretive to both distributable cash flow per unit and net asset value per unit while improving MEMP's operating margin.
Operational highlights of the transaction:
• Estimated net proved reserves of approximately 139 Bcfe
• 22% proved developed reserves
• Proved reserve to production ratio of approximately 30 years
• Current net production of approximately 12.6 MMcfe per day, of this amount, approximately 62% is natural gas and 38% is oil and natural gas liquids
• Producing wells: 42 gross (40 net), average working interest of 96%, which will be 95% operated by MEMP
• Approximately 8,450 gross acres (7,120 net), all of which is held by production
• 25 gross (19 net) current proved undeveloped horizontal drilling locations in the Cotton Valley formation
In conjunction with the closing of this transaction, MEMP has secured commitments from its bank group to expand its borrowing base to $380 million from the previous $300 million under its $1 billion revolving credit facility consisting of eleven participating banks.
Recommended Reading
Chevron’s Tengiz Oil Field Operations Start Up in Kazakhstan
2024-04-25 - The final phase of Chevron’s project will produce about 260,000 bbl/d.
TPH: Lower 48 to Shed Rigs Through 3Q Before Gas Plays Rebound
2024-03-13 - TPH&Co. analysis shows the Permian Basin will lose rigs near term, but as activity in gassy plays ticks up later this year, the Permian may be headed towards muted activity into 2025.
Chevron Hunts Upside for Oil Recovery, D&C Savings with Permian Pilots
2024-02-06 - New techniques and technologies being piloted by Chevron in the Permian Basin are improving drilling and completed cycle times. Executives at the California-based major hope to eventually improve overall resource recovery from its shale portfolio.
For Sale, Again: Oily Northern Midland’s HighPeak Energy
2024-03-08 - The E&P is looking to hitch a ride on heated, renewed Permian Basin M&A.
E&P Highlights: Feb. 26, 2024
2024-02-26 - Here’s a roundup of the latest E&P headlines, including interest in some projects changing hands and new contract awards.