Petrohawk Energy Corp., Houston, (NYSE: HK) plans to sell its interest in Terryville Field in Lincoln and Claiborne parishes, Louisiana, to Houston-based, privately held WildHorse Resources LLC for $320 million.
Terryville Field involves a 96% operated interest and primarily targets Cotton Valley production and also the Grey Sand and Bossier Sand zones. Current net production is approximately 20 million cubic feet of gas equivalent per day. Proved reserves as of Dec. 31 were approximately 110 billion cubic feet of equivalent (92% gas, 53% proved development).
Petrohawk chairman and chief executive Floyd Wilson says, "Within the first quarter, Petrohawk has sold two major fields, plus miscellaneous properties, as part of its billion-dollar 2010 divestiture program. These asset sales total nearly $500 million, with a third major sale process continuing to progress. We remain confident in our plan for 2010 and beyond.”
The sale is the second of four asset packages expected to be sold by Petrohawk in 2010.
Bank of America Merrill Lynch is marketing and financial advisor to Petrohawk. The deal is expected to close by May 31.
Wells Fargo Securities LLC analyst Michael Hall estimates the transaction multiples at $2.90 thousand cubic feet equivalent (Mcfe) per proved reserves ($5.49 per proved developed) and $16,000 per flowing Mcfe. Subash Chandra, analyst with Jefferies & Co. Inc., estimates $2.91 per Mcfe proved and $16,000 per flowing Mcfe. "We had expected somewhere closer to $10,000 per flowing Mcfe," he says. Analysts at Tudor, Pickering, Holt & Co. Securities Inc. value the deal at $2.91 per Mcfe and $96,000 per flowing barrel of oil equivalent.
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