Sanguine Gas Exploration LLC expanded its Midcon operations into the Arkoma Basin through the purchase of conventional gas assets from Vanguard Natural Resources Inc. for about $22.9 million.

The acquisition included 44 active operated wells, along with associated compression and gathering infrastructure, in the Potato Hills Field in southeastern Oklahoma. The properties produced roughly 5.5 MMcf/d, 100% of which was natural gas.

In addition to the Potato Hills deal, Vanguard said Aug. 2 it had closed two additional transactions of primarily nonoperated working interests in over 145 wells in multiple counties in Texas and Louisiana. The combined gross proceeds from the transactions were $5.5 million.

Vanguard’s divestitures are part of a plan the company announced following its exit from Chapter 11 bankruptcy in August 2017 to sell nearly 10% of its sprawling 774,000 net acres. The company’s assets span nearly every major basin in the Lower 48.

Sanguine said the Potato Hills acquisition of concentrated production establishes the company’s operations in the Arkoma Basin while also augmenting its expansive position in the neighboring Anadarko Basin.

Potato Hills is a significant structural feature within the Ouachita Fold Belt on the southern margin of the Arkoma Basin. Discovered in 1997, the field has produced over 250 Bcf from 49 vertical wells out of the shallow Pennsylvanian Jackfork Formation. Gross remaining reserves are over 50 Bcf, according to Sanguine’s press release.

Randy Nelson, Sanguine’s president, said the transaction is part of a company strategy to consolidate legacy vertical production in premier conventional reservoirs in the Midcontinent.

“The Potato Hills asset is one of the most economic conventional fields developed in the Midcontinent within the last 25 years,” Nelson said in a statement. “The long-lived dry gas production will provide sustained income to our multi-generational family enterprise.”

Sanguine was founded in 1977 by Randy Nelson’s father, Don Nelson. The company is currently the operator of more than 300 wells in the Midcontinent. Over its history, the company has operated over 750 drilling wells.

The Potato Hills purchase follows Sanguine’s 2016 acquisition of 130 operated producing wells in the East Anadarko Basin from EnerVest Ltd.

Vanguard Asset Sales

Since exiting bankruptcy, Vanguard has sold assets in properties located in the Permian Basin, Green River Basin, Williston Basin and Mississippi regions.

Currently, Vanguard is in the process of marketing all of its interests located in the Arkoma Basin within Arkansas. These properties include operated and nonoperated working interests with current production of about 8 MMcfe/d and associated development rights.

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The company has also begun marketing its ownership in five producing wells and associated undeveloped acreage in the Denver-Julesburg Basin in Weld County, Colo., through EnergyNet.

Additionally, Vanguard said it continues to progress other noncore asset sale processes and is actively preparing other assets for potential divestment, including certain assets in the Midcontinent and the Gulf Coast areas.

The Potato Hills assets were marketed for Vanguard by Eagle River Holdings LLC.