The company's latest California acquisition increases the volume of light oil production and proved reserves and provides for additional cash flow, Carbon Natural says. (Source: Shutterstock.com)
[Editor's note: This story was updated at 8:30 a.m. CT May 9.]
Carbon Natural Gas Co. acquired producing assets in California's Ventura Basin as well as bought out the remaining interest in its Appalachian-focused subsidiary in separate transactions totaling $100 million.
The Denver-based company said May 2 that its affiliate Carbon California Co. LLC completed the acquisition of properties and related facilities in the Ventura Basin from Seneca Resources Corp. for $43 million.
On May 4, Carbon Natural said in regulatory filings it had agreed to buy the remaining 73.5% outstanding Class A units of Carbon Appalachian Co. LLC from private equity firm Old Ironsides Energy for $57 million cash.
Carbon Natural formed Carbon Appalachia and Carbon California in 2016 to acquire oil and gas producing properties in southern Appalachia and California’s Ventura Basin.
As of year-end 2017, Carbon Appalachian held about 335 billion cubic feet equivalent of proved developed producing reserves in the Appalachian Basin and Carbon California had completed acquisitions comprising about 13 million barrels of oil equivalent, according to the company's website
The company said its latest acquisition in the Golden State increases the volume of light oil production and proved reserves of Carbon California and provides for additional cash flow from Carbon’s Ventura Basin operating region.
RELATED: Why California Oil Production Needs To Ramp Up
Current net production from the acquired Ventura assets is roughly 920 barrels of oil equivalent per day (79% oil and liquids). The company estimates the properties contain 17.6 million barrels of proved reserves (77% oil and liquids).
The acquired properties also include an inventory of proved developed non-producing and proved undeveloped growth opportunities on which the company said it will commence a development plan.
Carbon holds a 54% ownership interest in membership units of Carbon California. Carbon is manager of Carbon California and a portion of the company’s general and administrative expenses is allocated to and paid by Carbon California.
Following the closing of the transaction with Old Ironsides, which is expected by September, Carbon Natural will own 100% of the issued and outstanding ownership interests in Carbon Appalachia and will become a wholly-owned subsidiary of Carbon.
Financing for the Ventura transaction was provided by the company and an institutional investor, each of which purchased $5 million of Class A units of Carbon California for an aggregate cash consideration of $10 million.
Carbon California also entered into an amendment to its existing senior secured note credit facility to increase its borrowing base to $41 million from $15 million and sold $3 million senior subordinated notes due 2024.
Emily Patsy can be reached at epatsy@hartenergy.com.
Recommended Reading
BP Pledges Strategy Reset as Annual Profit Falls by a Third
2025-02-11 - BP CEO Murray Auchincloss pledged on Feb. 11 to fundamentally reset the company's strategy as it reported a 35% fall in annual profits, missing analysts' expectations.
Activist Elliott Builds Stake in Oil Major BP, Source Says
2025-02-10 - U.S.-based Elliott is seeking to boost shareholder value by urging BP to consider transformative measures, Bloomberg News reported Feb. 8.
Italy's Intesa Sanpaolo Adds to List of Banks Shunning Papua LNG Project
2025-02-13 - Italy's largest banking group, Intesa Sanpaolo, is the latest in a list of banks unwilling to finance a $10 billion LNG project in Papua New Guinea being developed by France's TotalEnergies, Australia's Santos and the U.S.' Exxon Mobil.
What's Affecting Oil Prices This Week? (Feb. 3, 2025)
2025-02-03 - The Trump administration announced a 10% tariff on Canadian crude exports, but Stratas Advisors does not think the tariffs will have any material impact on Canadian oil production or exports to the U.S.
BP Cuts Over 5% of Workforce to Reduce Costs
2025-01-16 - BP will cut over 5% of its global workforce as part of efforts to reduce costs and rebuild investor confidence.
Comments
Add new comment
This conversation is moderated according to Hart Energy community rules. Please read the rules before joining the discussion. If you’re experiencing any technical problems, please contact our customer care team.