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Evolution Acquires Non-operated Wyoming Natural Gas Interests
02/23/2022![Evolution-Acquires-Non-operated-Wyoming-Natural-Gas-Interests](https://images2.rextag.com/public/blog/Evolution-Acquires-Non-operated-Wyoming-Natural-Gas-Interests.png)
Evolution Petroleum announced that it has entered into a definitive agreement to acquire non-operated natural gas assets in the Jonah Field in Sublette County, Wyoming from privately-owned Exaro Energy III, LLC.
The purchase price of the transaction is $29.4 million, with the closing date scheduled for April 1, 2022.
As a result of this accretive transaction, Evolution Petroleum is able to diversify into natural gas assets in Wyoming, providing access to multiple attractive markets including to the west through the Opal market hub, with the optionality to flow to eastern markets, according to its president and CEO, Jason Brown.
The Houston-based company, Evolution, owns, manages, and develops producing properties with the aim of providing a sustainable dividend yield for its shareholders. As part of the company's long-term strategy, it will strive to develop a diversified portfolio of oil and natural gas assets.
At present, Evolution's portfolio of non-operated assets includes interests in multiple geological formations, including the Barnett Shale in North Texas, the Delhi Field in Louisiana, the Hamilton Dome Field in Wyoming, and assets in the Williston Basin in North Dakota — the result of a $25.9 million acquisition closed earlier in the year.
Due to the company's recent acquisitions in the Williston Basin and Jonah Field, the company has been able to boost cash flow generation and significantly grow production volumes through low-risk development drilling. The top management of Evolution also plans to extend dividend payments through these acquisitions for the next decade.
Among the assets are 42 billion cubic feet of natural gas equivalent (bcfe) of long-life proved developed producing reserves in the Jonah Energy LLC-operated natural gas field in the northwestern portion of the Green River basin. The field has 648 producing wells and spawns approximately 1,040 net acres.
A total of 14.2 MMcfe/d is currently being produced from acquired assets; 88% of that is natural gas, 6% is oil, and 6% is NGL. Jonah Energy has operated all of the wells since 2014, and the company is an established operator in Wyoming.
Within the last two years, Evolution has more than 400% increased production and reserves. Moreover, this growth and value creation have occurred without material shareholder dilution or onerous debts.
After taking into account expected incremental debt, Brown estimates a debt level post-closing to be below one-time Evolution's pro forma annualized EBITDA.
That transaction took effect on February 1. We anticipate closing on or about April 1. The deal is expected to be funded from cash on hand and borrowings under the Company's existing senior credit facility.
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Energy Transfer LP Races to Carry Permian Basin Gas to Gulf Coast Hubs
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The ever-increasing demand for natural gas exports from the Gulf Coast started a race to further develop Permian Basin. Various companies, including Kinder Morgan and MPLX, are among those looking at building new pipelines in the region due to the demand spike. But Energy Transfer seems to edge past them into the lead since its project strikes as the most economical option for the basin outside of capacity expansions on existing pipelines and could essentially add 1.5-2 Bcf/d of transport capacity with just 260 miles of new pipe.
Lime Rock Resources Starts the Year With a Bang — a Money Bang!
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Still waters run deep: after patiently waiting for 2 years, Lime Rock Resources starts the year with a pair of acquisitions worth $358.5 million The two acquisitions include Abraxas Petroleum’s Williston Basin position in North Dakota: about 3,500 acres of land and 19,400 boed of net production, as well as properties situated in Burleson, Milam, and Robertson in Texas from a third party, that contain 46,000 contiguous net acres and produce 7,700 boed as of the closing of the deal. The company intends to intensify its focus on low-risk opportunities and margins, which will significantly boost Lime’s market position going further.
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The pipeline industry in the USA faced and still faces a range of regulatory challenges, including permitting delays, environmental requirements, and public opposition to pipeline projects. In recent years, pipeline projects like the Keystone XL and Dakota Access pipelines had legal and regulatory obstacles that delayed or canceled their construction. Keystone XL Pipeline, proposed by TransCanada in 2008, aimed to transport crude oil from Canada (around Calgary and Edmonton) to refineries on the Gulf Coast (Port Arthur). The project faced opposition from environmental groups and indigenous communities, who argued that it would contribute to climate change and pose a risk to water resources. In 2015, President Obama rejected the project, citing concerns about its environmental impact. However, in 2017, President Trump revived the project, leading to further legal challenges. In June 2021, U.S. President Joe Biden officially canceled the project on his first day in office.
![$data['article']['post_image_alt']](https://images2.rextag.com/public/blog/282_Blog_Renewable Natural Gas How RNG Changes the Industry.jpg)
The renewable natural gas (RNG) industry in the United States is showing promising signs of growth. As of 2019, the U.S. consumed 261 billion cubic feet (BCF) of RNG, primarily utilized by independent power producers, electric utilities, and various commercial and industrial entities. However, this figure represents only a small fraction of its potential. Research indicates that the U.S. could theoretically produce up to 2,200 BCF of RNG through anaerobic digestion alone, which would equate to about 11% of daily national natural gas consumption.
![$data['article']['post_image_alt']](https://images2.rextag.com/public/blog/295_Blog_Renewable Efforts Lag as Global Oil and Gas Demand Continues to Rise.jpg)
Recently, the progress toward an energy transition is hitting a snag. Sales of electric vehicles are decelerating, and the growth in wind and solar power needs to be keeping pace with expectations. To make matters more challenging, electricity prices are climbing when they were expected to fall. Amidst these setbacks, the oil and gas sectors are proving resilient. According to BP's latest energy outlook, not only are these energy mainstays here to stay, but their demand is expected to remain relatively high even after reaching a peak. Interestingly, BP forecasts that oil demand will reach its zenith next year, marking a critical moment in energy consumption trends. This isn't the first time BP has projected a peak in oil demand. Back in 2019, their review anticipated a decline in demand growth, but the prediction fell flat. Instead, oil demand surged to unprecedented levels following the end of the global pandemic lockdowns, defying previous forecasts and underscoring the enduring dominance of traditional energy sources in the global market.