EnerVest, EV Energy To Acquire Range's Ohio Appalachian Properties For $330MM

Transaction Type
Sellers
Buyers
Announce Date
Post Date
Close Date
Estimated Price
330MM
Description

Acquired 418,000 net acres in OH Appalachian Basin, gaining 25 MMcfe/d.

EV Energy Partners LP, Houston, (Nasdaq: EVEP) and certain institutional partnerships managed by privately held parent EnerVest Ltd. have closed the first phase of the acquisition of Ohio Appalachian Basin oil and gas properties from Range Resources Corp., Fort Worth, Texas, (NYSE: RRC) for an adjusted price of $300 million.

EV Energy's portion of the deal is $137.9 million. It was originally valued at $151.8 million on Feb. 8 but was lowered due to third-party consents on certain properties not yet received as of the initial closing date. The property interests will be acquired if such consents are received.

Subsequent closings are expected to take place covering the remaining approximately $23 million of properties.

EV Energy acquired a 46.15% interest in the properties, with approximately 3,300 producing wells in Ohio tight-gas sand properties covering approximately 465,000 gross acres (418,000 net). Net production is approximately 25 million cubic feet of gas equivalent per day. Estimated proved reserves as of Jan. 1 net to EV Energy (based on recent strip prices) are approximately 69.6 billion cubic feet equivalent.

EV Energy funded its portion of the deal with borrowings under its credit facility. Following closing, the company's outstanding debt is $345 million.

Range chairman and chief executive John H. Pinkerton, says, "Since early 2009, we have sold properties containing approximately 6,200 wellbores. This represents roughly 50% of our well count, but less than 10% of our production and reserves. During this period, we have continued to drive up production and reserves by focusing on our lower-cost, higher-return plays. Not only do these plays have much lower finding costs, our operating costs are decreasing significantly with the reduction in well count."

EV Energy chairman and CEO John B. Walker says, "This acquisition is our second in the Appalachian Basin within the past six months. It provides EVEP with additional long-life base production and development drilling opportunities in an area where we have a sizeable asset position and substantial experience. In addition, it provides us with a significant opportunity for future production growth through drilling in the Knox group formation, a play where EnerVest has had drilling success over the past six years."

RBC Richardson Barr was advisor to Range Resources.