Canyon Creek CEO Luke Essman said the JV partnership with Pivotal Petroleum Partners signals a renewed interest in the Arkoma. (Image: Hart Energy and Shutterstock.com)
Canyon Creek Energy—Arkoma LLC is planning to boost drilling activity across its 100,000-gross-acre position in the Arkoma Stack play through a new joint venture (JV).
The Tulsa, Okla.-based E&P said April 19 it entered a joint development agreement with Pivotal Petroleum Partners II LP to jointly fund Arkoma Stack development on Canyon Creek’s acreage in southeastern Oklahoma.
Luke Essman, president and CEO of Canyon Creek, said the agreement marks a revival of the Arkoma Basin, a region where drilling activity dates back to the 1930s.
“We are excited to partner with Pivotal to continue delivering competitive investment returns within our Arkoma Stack acreage. Their investment signals the industry’s renewed interest in developing the Arkoma’s world-class rock,” Essman, who was named one of Oil and Gas Investor’s Thirty Under 40 honorees in 2016, said in a statement.
In October 2017, The Oklahoman ranked the Arkoma Basin as the fastest-growing oil and natural gas field in the U.S. following a 175% jump in the basin’s rig count from a year prior.
Canyon Creek’s JV follows an announcement earlier in this year to double its position in the Arkoma Stack with the acquisition of 50,000 gross acres in January. The deal also increased the company’s inventory of horizontal drilling locations to nearly 1,300.
In its JV with Pivotal, Canyon Creek plans to drill 18 wells in 2018 targeting the Woodford Shale and Mayes Shale in various locations on the company’s acreage in Atoka, Coal, Hughes and Pittsburg counties, Okla.
Pivotal will fund 75% of Canyon Creek's working interest in all wells covered by the JV agreement and once Pivotal achieves a preferred return, the majority of the wellbore working interest and net revenue interest will revert back to Canyon Creek.
Pivotal, a Dallas-based oil and gas company backed by Tailwater Capital LLC, is focused exclusively on acquiring nonoperated working interests in oil and liquids-rich basins. The company’s partnership with Canyon Creek will allow it to “deploy capital into wells with compelling rates of return alongside a highly respected operator in the basin,” Billy DeArman, principal at Tailwater Capital, said in a statement.
Canyon Creek is backed by Vortus Investment Advisors, a Fort Worth, Texas-based private-equity firm focused on lower to middle market upstream investments.
Kirkland & Ellis LLP was legal adviser for Canyon Creek in the JV agreement and Thompson & Knight LLP acted as legal adviser for Pivotal.
Emily Patsy can be reached at epatsy@hartenergy.com.
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