The combination of the Prime Rock and New Dawn acreage positions in the Louisiana Austin Chalk creates “one of the premier positions in the entire trend,” says Ghasem Bayat, New Dawn vice president. (Source: Hart Energy/Shutterstock.com)
Two privately-owned oil and gas companies agreed to team up on June 12 to jointly develop their assets in the red-hot Louisiana Austin Chalk play.
On June 12, Prime Rock Resources LLC, a Lime Rock Partners portfolio company, said it formed a joint venture (JV) with New Dawn Energy LLC for undisclosed terms. The JV will jointly develop more than 100,000 net acres contributed by each company in central Louisiana targeting the Austin Chalk.
After a period of being largely written off, Louisiana’s Austin Chalk play is experiencing a new era of popularity. Earlier this year, Charles Goodson, president and CEO of PetroQuest Energy Inc., told Hart Energy’s DUG Haynesville conference attendees that the Austin Chalk is currently in “its third wave.”
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Several large E&Ps amassed nearly 600,000 acres in the Louisiana Austin Chalk as part of this resurgence last year including ConocoPhillips Co. and Marathon Oil Corp.
An early mover, Prime Rock acquired over 100,000 net acres in central Louisiana targeting the emerging Austin Chalk play. The company also currently holds participating interests in the Permian’s Delaware Basin in New Mexico.
Based in Midland, Texas, Prime Rock is funded with over $125 million of equity commitments from Lime Rock and management. The company was founded in April 2017 by Manny Sirgo and former executives from Endurance Resources, another Lime Rock-backed company focused in the Delaware Basin that sold to Concho Resources Inc. in late 2016.
New Dawn was another early mover in the Louisiana Austin Chalk. The Houston-based company, which formed in April 2015, built its position in the play through the acquisition of LaBokay Natural Resources in 2017.
In total, New Dawn owns over 270,000 net acres of mineral servitudes in the western parishes of Louisiana, including more than 150,000 net acres in the Austin Chalk trend.
Ghasem Bayat, who manages New Dawn as its executive vice president of E&P, said he believes the combination of the two companies’ respective acreage positions in the Louisiana Austin Chalk creates “one of the premier positions in the entire trend.”
“We expect this agreement to create significant value for both parties and look forward to working with Prime Rock to jointly develop and grow these assets in the future,” Bayat added in a statement on June 12.
The development area in the JV agreement covers roughly 120,000 net acres in Allen, Avoyelles, Beauregard, Rapides and Vernon parishes, primarily in the legacy Masters Creek Field.
“We are excited about the potential benefits of applying modern drilling and completion technology in one of the most prolific legacy Austin Chalk fields in the entire trend,” Sirgo, president and CEO of Prime Rock, said in a statement.
The companies expect initial development under the agreement to begin during the fourth quarter of this year. Also part of the JV agreement, the companies established an area of mutual interest in which they will work together to jointly acquire additional acreage, Prime Rock said.
Emily Patsy can be reached at epatsy@hartenergy.com.
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