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Crescent Energy Boosts Portfolio with Eagle Ford Acquisition: Expands Non-Operated Assets06/20/2023
Big announcement! Crescent Energy is set to bolster its inventory in the play by acquiring operated and working interests from Mesquite Energy.
Crescent Energy Co. seals a $600 million cash deal to acquire assets in the Eagle Ford Shale from Mesquite Energy Inc. (formerly Sanchez Energy).
Crescent has announced that their definitive purchase agreement with Mesquite Energy grants them operatorship and working interests, leading to a substantial expansion of Crescent's presence in the Eagle Ford region. This deal builds upon the shale play's impressive streak of successful mergers and acquisitions, which began with a strong first quarter. The assets acquired from Mesquite Energy encompass approximately 75,000 contiguous net acres, predominantly situated in Dimmit and Webb counties, Texas.
Growth and Operational Control in Eagle Ford
- The acquired asset brings a large, proven inventory with significant growth potential, effectively doubling Crescent's operated Eagle Ford inventory. Crescent sees additional upside in the Austin Chalk and Upper Eagle Ford formations.
- Crescent is acquiring over $700 million of proven developed producing PV-10 value, reflecting the asset's financial value and stability.
- The transaction is expected to immediately enhance operating cash flow, free cash flow, and net asset value, showcasing the positive financial benefits for Crescent.
- Post-transaction, Crescent will significantly increase its non-operated interest from approximately 15% to around 50% in the acquired assets. Crescent will operate approximately 90% of its Eagle Ford position, consolidating operational control and establishing a prominent presence in the region.
- The acquisition expands Crescent's base of predictable cash flow, with the acquired assets currently producing an average of about 20,000 barrels of oil equivalent per day (boe/d), mostly consisting of liquids (70%). The asset's 12-month decline rate of 17% provides stability and consistent production levels.
“As operator, we look forward to engaging with all stakeholders to improve performance and maximize value across this high-quality asset base,” David Rockecharlie said.
According to Crescent CEO, this acquisition solidifies the company's position as a leading consolidator in the Eagle Ford region. He stated that it aligns with their long-standing strategy of low-risk acquisitions and exploitation.
Having been an active non-operated owner of these assets for the past six years, they are well acquainted with them and foresee significant potential for growth by increasing their scale and assuming operational control. As the operator, they are eager to collaborate with all stakeholders to enhance performance and maximize the value of this exceptional asset base.
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Callon Acquires $1.1 Billion Delaware Assets and Bows Out of Eagle Ford - Here's What You Need to Know
Callon is set to purchase Percussion Petroleum's Delaware assets for $475 million while selling its Eagle Ford assets to Ridgemar for $655 million. In a strategic step to optimize its operations, Callon Petroleum recently made headlines by sealing two deals on May 3, totaling a staggering $1.13 billion. The company is taking confident steps to bolster its presence in the Delaware Basin while bidding farewell to its stake in the Eagle Ford Shale.
Baytex Energy Group has announced that it will acquire Eagle Ford exploration and production company, Ranger Oil, for approximately $2.5 billion in cash and stock, which includes taking over the company's existing debt. Upon the successful closure of the acquisition, Baytex will have a controlling stake of approximately 63% in the newly merged company, leaving Ranger shareholders with around 37%. This significant move is in line with a trend of substantial mergers and acquisitions in the Eagle Ford area, with Marathon Oil, Devon Energy, and Chesapeake Energy among the companies involved in recent transactions.
Rangeland Energy has agreed to sell Rangeland Midstream Canada to Kingston Midstream Alberta and remains committed to future Canadian midstream investments. Texas-based Rangeland Energy, supported by financial partner EnCap Flatrock Midstream, has inked a deal to sell its Canadian subsidiary, Rangeland Midstream Canada Ltd., to Calgary's Kingston Midstream Alberta Ltd. for cash.
The merger between ONEOK and Magellan received approval from Magellan shareholders, securing just 55% of the total votes at Magellan’s meeting on Sept. 21. ONEOK Inc. has successfully concluded the acquisition of Magellan Midstream Partners LP on Sept. 25. The deal will bring together their respective assets and expertise, resulting in a powerful entity boasting an extensive network of approximately 25,000 miles of pipelines primarily focused on transporting liquids.
Viper Energy's deal, comprised of cash and equity, secures an additional 2,800 net royalty acres in the Midland Basin and 1,800 in the Delaware Basin. Viper Energy Partners LP, a Diamondback Energy Inc. subsidiary, has inked a deal to acquire mineral and royalty interests in the Permian Basin. The deal, valued at around $1 billion, is with Warwick Capital Partners and GRP Energy Capital. Viper was established by Diamondback with the purpose of owning, purchasing, and capitalizing on oil and natural gas assets in North America, specifically targeting mineral and royalty interests.