Memorial Resource Development Corp. (MRD) entered into separate transactions to acquire or lease certain acreage adjacent to its existing operating areas in North Louisiana, the company said Sept. 21.
The company entered a definitive purchase and sale agreement with a third party to acquire about 45,807 gross (45,121 net) acres in Jackson and Lincoln parishes. This transaction is scheduled to close in this year’s fourth quarter, and its effective date is Aug. 1.
The properties are southeast of MRD's current position in Terryville Field, in southern Lincoln and northern Jackson parishes. There are reservoirs holding over-pressured, multistacked pays with similar geology to Terryville Field. There are also over-pressured Upper Red and Lower Red pay intervals ranging from 350 to 1,000 feet thick. The acreage position is good for horizontal development, the company said.
MRD expects one rig to hold the acreage through production within five years, and there are about 588 gross identified potential horizontal drilling locations. This adds to the company’s drilling inventory through three primary intervals in the Lower Cotton Valley in two Upper Red zones and one Lower Red zone.
Since January 1, 2015, MRD has either added, acquired, agreed to acquire, or secured the option to lease, an additional 132,758 net acres in North Louisiana for a total of about $373.8 million, which assumes the full option lease exercise cost, through an acreage option agreement and organic leasing efforts.
Also, the company said that the borrowing base under its senior secured revolving credit facility was increased to $1billion from $725 million in a regular semiannual redetermination.
Also, the company opened an offer of about 10.25 million common shares. The underwriter was granted an option to purchase about 1.53 million more. Net proceeds will fund part of the purchase price for the North Louisiana properties acquisition. If the acquisition is not completed, the proceeds will support general corporate purposes.
Barclays is the sole book-running manager.
Recommended Reading
What's Affecting Oil Prices This Week? (March 25, 2024)
2024-03-25 - On average, Stratas Advisors are forecasting that oil supply will be at a deficit of 840,000 bbl/d in 2024.
Russia Orders Companies to Cut Oil Output to Meet OPEC+ Target
2024-03-25 - Russia plans to gradually ease the export cuts and focus on only reducing output.
Oil Broadly Steady After Surprise US Crude Stock Drop
2024-03-21 - Stockpiles unexpectedly declined by 2 MMbbl to 445 MMbbl in the week ended March 15, as exports rose and refiners continued to increase activity.
US Gulf Coast Heavy Crude Oil Prices Firm as Supplies Tighten
2024-04-10 - Pushing up heavy crude prices are falling oil exports from Mexico, the potential for resumption of sanctions on Venezuelan crude, the imminent startup of a Canadian pipeline and continued output cuts by OPEC+.
Association: Monthly Texas Upstream Jobs Show Most Growth in Decade
2024-04-22 - Since the COVID-19 pandemic, the oil and gas industry has added 39,500 upstream jobs in Texas, with take home pay averaging $124,000 in 2023.