![](/sites/default/files/styles/hart_news_article_image_640/public/image/2019/02/eca-greylock.jpg?itok=VApTa2DL)
ECA’s management team will continue to develop the assets in the newly created Greylock Energy, which is backed by ArcLight Capital Partners and led by ECA’s former CEO. (Source: Hart Energy)
In an almost effortless pirouette, Energy Corp. of America’s (ECA) management and staff are now Greylock Energy LLC employees following a deal to buy ECA’s massive Marcellus upstream and midstream assets late last month.
Greylock, backed by ArcLight Capital Partners, closed on a deal for ECA on Nov. 28. The price was not disclosed. Kyle Mork, the former CEO of ECA who now leads Greylock, said that ArcLight is backing the company with a $400 million equity commitment and that the transaction price “is embedded in that number.”
“What I can tell you is within the $400 million, even including the transaction price, we really feel like we are really positioned to grow both the upstream and midstream businesses,” Mork said in an interview with Hart Energy.
ECA, founded in 1963, is focused on the Appalachia Basin where it holds acreage in West Virginia and Pennsylvania totaling about 713,000 net acres and 4,400 operated wells, most of which are conventional wells. The company also has 2,600 miles of gathering assets and other midstream infrastructure.
Mork said the company has about 100 producing Marcellus wells.
“In future development, I expect we’ll be primarily focused on Marcellus in the near term,” he said, adding that Greylock also has good exposure to the Utica in northern West Virginia and central Pennsylvania.
“So we’re excited [but] I don’t think we’ll be drilling a Utica well next month,” he added.
Mork said the company is monitoring the progress of Utica development and tests and will begin exploring “sooner rather than later.”
The ECA transaction was set in motion after ArcLight approached the company several months ago about a possible deal.
“This is ArcLight partnering with our team to create Greylock and buy the asset from ECA to really jumpstart Greylock,” Mork said. “We’ve got substantial upstream assets, midstream assets and we’re well positioned with the commitment from ArcLight to grow both sides of the business.”
Mork said that, in a sense, he was on both sides of the transaction—transitioning to Greylock while also knowing ahead of time about the assets he will develop.
“The neat thing is all employees moved across to Greylock as well. Our team, and the broader employee base that’s been managing that,” he said.
The staff includes a team that builds and manages the company’s midstream operations. Greylock’s acquisition includes outright ownership of First ECA Midstream—a joint venture (JV) between ECA and private-equity firm First Reserve Corp. The JV was formed in 2011 with a $100 million commitment from First Reserve.
Mork said the ECA midstream assets and First ECA will move gas to Greylock and third-party producers.
“One piece of the midstream business is building out for Greylock’s upstream development,” he said. “But then the other piece is we’ve really had developed experience and had good success at building midstream for third parties. That could be, in the future, other producers and it could also be industrial users, power plants, those sorts of things.”
Dan Revers, managing partner and founder of ArcLight, said the experience of Greylock’s team is the key to creating wealth out of the assets.
“The Marcellus is a world-class shale resource and this investment serves as an ideal platform for additional upstream and midstream growth opportunities in this important region,” Revers said.
Darren Barbee can be reached at dbarbee@hartenergy.com.
Recommended Reading
Energy Transition in Motion (Week of July 26, 2024)
2024-07-26 - Here is a look at some of this week’s renewable energy news, including news on another U.S. hydrogen hub.
Energy Transition in Motion (Week of June 28, 2024)
2024-06-28 - Here is a look at some of this week’s renewable energy news, including plans for another offshore wind energy lease sale.
Energy Transition in Motion (Week of Aug. 9, 2024)
2024-08-09 - Here is a look at some of this week’s renewable energy news.
Global Grid Infrastructure to Double by 2050, DNV Says
2024-06-19 - To meet growing electricity demand, global grid infrastructure is set to double by 2050, according to Oslo-based DNV.
Energy Transition in Motion (Week of Aug. 16, 2024)
2024-08-16 - Here is a look at some of this week’s renewable energy news.