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Winds of Change: Admiral Sold Its Assets in Delaware Basin
03/17/2022
In the Delaware Basin, Petro-Hunt Permian, LLC, a wholly-owned subsidiary of Petro-Hunt, L.L.C., has acquired oil and gas production and leasehold properties in northwest Reeves and northeast Culberson counties from APR Operating LLC. The terms of the transaction weren’t disclosed as of yet.
The company on the other side of the deal is a privately held E&P. It specializes in the acquisition and development of oil and gas properties in the Permian Basin. Its majority owners are funds managed by private equity firms Ares Management LP and Pine Brook. Admiral Permian Resources is headquartered in Midland, Texas.
APR's acquired assets include predominantly operated oil and gas production along with 21,430 net acres of leasehold located in the Delaware Basin. Oil and gas production from those assets amounted to 7,000 barrels/day (bbl/d) and 100 million cubic feet (MMcf/d) last year respectively. To take advantage of it, Petro-Hunt plans to begin an active development drilling program on these assets in the coming months.
When it comes to Petro-Hunt’s own circumstances, its origins date to the first quarter of the 20th century. They are also a privately owned E&P company. In addition to operating 775 oil wells and contributing to over 8,100 non-operated wells, it is ranked among the nation's top 10 private liquids (oil) producers. And with the acquisition of APR assets, Petro-Hunt now has approximately 57,000 bbl/d of oil production and 220 MMcf/d of gas production.
Kirkland & Ellis advised APR Operating LLC (Admiral) in its definitive agreements to sell its oil and gas in the Permian Basin to Petro-Hunt LLC (Petrohunt). The purchase and sale agreement was executed on Jan. 11, 2022, and closed on March 9, 2022.
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All Eyes Are on the Rocky Mountains State, as PDC Acquires Great Western for $1.3B
Great Western Petroleum's assets will be acquired by PDC Energy for $1.3 billion. Via this deal, PDC Energy’s position in the D-J basin increases roughly to 230,000 net acres. Denver-based Great Western has core operations in Weld and Adams counties in Colorado with 54,000 net acres and about 55,000 boe/d (42% oil / 67% liquids) of PDP. As part of the agreement, the acquisition will be financed by issuing 4 million shares of common stock to existing Great Western shareholders and by providing $543 million in cash to the company. All in all, PDC expects to increase its total production by 25% and its oil production by 35% as a result of the deal. The deal should also result in some synergies including a 15% reduction in overall cost per BOE.
Canadian Assets on Sale: Energy Transfer Sells Gas Processing Bussines to Pembina-KKR for $1.3 Billion
Under the agreement, Energy Transfer will sell its 51% interest in Energy Transfer Canada to the Pembina-KKR joint venture, for more than CA$1.6 billion (US$1.3 billion) including debt and preferred equity. KKR's funds already own the remaining stake. TC’s assets include 6 natural gas processing plants with a combined operating capacity of 1.29 Bcf/d and an 848-mile naturalgas gathering and transportation network in the Western Canadian Sedimentary (WCS) basin. While this process is underway, Pembina and KKR will combine their Western Canadian natural gas processing assets into a single, new joint venture entity — Newco, owned 60% by Pembina and 40% by KKR. This new entity is expected to have a natural gas processing capacity of about 5 Bcf/d or about 16% of Western Canada’s total processing capacity.
The Williston Basin is a big area filled with layers of rock that sits next to the Rocky Mountains in western North Dakota, eastern Montana, and the southern part of Saskatchewan in Canada. This area covers roughly 110,000 square miles. Geologically, it's very similar to the Alberta Basin in Canada. People started drilling for oil in the Williston Basin back in 1936, and by 1954, most of the land where oil could likely be found was already claimed for drilling. The Bakken Formation with parts of Montana, North Dakota, Saskatchewan, and Manitoba has become one of only ten oil fields globally to yield over 1 million barrels per day (bpd) since the late 2000s. It is currently the third-largest U.S. shale oilfield, behind the Permian and Eagle Ford. The boom in the Bakken started around September 2008, coinciding with the U.S. housing market crash. The application of new technologies, such as swell packers enabling multiple-stage fracturing, significantly enhanced oil recovery, making the Bakken Formation a key player in the U.S. In 2022, the Bakken oil field saw big improvements in how much oil and gas it could produce. At the start of the year, 27 drilling rigs were working there, more than double the 11 rigs from the start of 2021. Important upgrades included making the Tioga Gas Plant able to process 150 million cubic feet more gas each day, and making the Dakota Access Pipeline bigger, increasing its oil transport capacity from 570,000 to 750,000 barrels every day.
Continental Resources is expanding its operations in the Midland Basin, including taking over some assets that used to belong to Occidental Petroleum. The company plans to use its expertise in exploration in this area.
Equinor and EQT Corporation have agreed that Equinor will exchange its operated assets in the Marcellus and Utica shale formations in Ohio for a stake in EQT’s non-operated interests in the Northern Marcellus formation.