EV Energy Partners, L.P. today announced that it had entered into agreements to acquire natural gas and oil properties for $202.7 million.
Acquisitions
EVEP has entered into four agreements to acquire natural gas and oil properties in the San Juan Basin, Mid-Continent (Oklahoma, Texas Panhandle and Kansas), Eastland County, Texas and West Virginia for $202.7 million. The acquisitions, which have been approved by the Board of Directors, are expected to close between the end of August and mid-September, and are subject to customary closing conditions and purchase price adjustments. The San Juan Basin assets are being acquired from institutional partnerships managed by EnerVest, Ltd., the West Virginia assets are being acquired from EnerVest, Ltd. and the Mid-Continent assets are being acquired from an EnCap sponsored company.
The properties to be acquired include:
- Over 440 producing wells
- Estimated proved reserves (based on recent strip prices) of approximately 88 Bcfe
- 58% natural gas, 18% oil and 24% natural gas liquids
- 94% proved developed producing
- High operating percentage and working/net revenue interests
- Reserves-to-production ratio of 18.7 years
- Current net daily production of approximately 12,900 Mcfe per day
EVEP plans to initially finance the acquisitions with borrowings under its amended and restated credit facility. EVEP has agreed with EnerVest that it will receive its share of the net proceeds, estimated to be approximately $35 million, in EVEP common units based on the volume weighted average price of the common units from August 7th through August 14th (the three trading days prior to and after today's announcement). However, in order to receive common units, EnerVest must receive the consent of the investors in its institutional partnerships. If EnerVest does not receive the consent, only approximately $5 million of the estimated proceeds to EnerVest will be paid in common units, and the balance will be paid in cash.
John B. Walker, Chairman and CEO, stated, "We are very pleased with our ongoing ability to find attractive, synergistic acquisitions which, combined with our continued strong cash flow generation, has enabled us to provide our unit holders with significant unit distribution growth. After the closing of these acquisitions, EnerVest, its employees, EVEP management and its directors will have purchased units or received units in transactions approaching $50 million year-to-date. We believe in the long-term growth prospects for EVEP."
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