Silver Hill Energy Partners LP is entering the Bakken play through the acquisition of Liberty Resources II.
Dallas-based Silver Hill agreed to acquire Denver-based Liberty’s interests in oil and gas properties, rights and related assets in North Dakota, the companies announced Jan. 31.
Net production from the acquired assets averaged around 13,000 boe/d (76% oil, 86% liquids) in December and its proved developed producing reserves total approximately 16 MMBoe.
Liberty has 84,000 net acres across Mountrail, Burke, Williams and Divide counties, North Dakota.
Liberty currently has one rig drilling in Mountrail County, and the company expects to complete 12 additional wells during the first quarter. The acquired assets include more than 300 gross operated drilling locations.
Silver Hill will also assume 100% ownership of Liberty Midstream Solutions LLC, which owns gas gathering, gas processing and produced water logistics assets in North Dakota.
The midstream assets include 33 miles of gas gathering lines, 22 miles of water gathering lines, a 33 MMcf/d gas processing facility and five saltwater disposal wells with about 60,000 bbl/d of disposal capacity.
“After years of considering various opportunities for entry points into the Bakken, we are thrilled to be acquiring what we believe is an ideal initial upstream and midstream development platform for us in the play,” said Kyle D. Miller, founder and CEO of Silver Hill, in a news release.
The transaction is expected to close March 14. Financial terms of the acquisition were not disclosed.
Silver Hill plans to finance the acquisition through a combination of debt and equity. Equity consideration will come from Silver Hill Energy Partners III LP—Silver Hill’s third partnership and first institutional private equity fund—as well as from another Silver Hill-sponsored partnership.
Silver Hill Energy Partners III LP closed in 2022 with $1.02 billion in capital commitments.
Senior bank debt from each partnership’s credit facilities will also finance the Liberty acquisition, Silver Hill said.
Silver Hill said it plans to use the Liberty acquisition in the Bakken “as a springboard for future growth in the area through additional bolt-on acquisitions and related investments in upstream, midstream, minerals and royalties.”
Silver Hill III was formed following the successful merger of Silver Hill I and II’s upstream assets into RSP Permian in 2017 for $2.5 billion in cash and stock. RSP Permian later sold to Concho Resources, which was later acquired by ConocoPhillips Co. in a $13.3 billion transaction in early 2021.
RELATED
Recommended Reading
Magnolia Bolts-on 27,000 Acres in South Texas’ Giddings Field
2024-05-09 - Magnolia Oil & Gas said it paid $125 million to a private operator to acquire the acreage, which has minimal production.
Tetra Tech Acquires Convergence Controls & Engineering
2024-05-09 - Tetra Tech is acquiring Convergence Controls & Engineering to expand its digital water and energy offerings.
Energy Transfer Remains Hungry for M&A, Sees 1Q Oil Volumes Surge
2024-05-09 - Energy Transfer reported record first-quarter crude volumes and expects demand for petrochemicals to continue rising.
US Republican Attorneys General Sue to Stop EPA's Carbon Rule
2024-05-09 - The rule, finalized by President Joe Biden's administration last month as part of an effort to combat climate change, was challenged in three lawsuits filed in the U.S. Court of Appeals for the District of Columbia Circuit.
Time is Money: Shell Prioritizes Speed with Brownfield Strategy
2024-05-09 - Shell’s replicant strategy trades customization of the production unit for a sped-up cycle time for Whale, Sparta developments in the deepwater Gulf of Mexico.