Industry News - Mergers & Acquisitions - EV Energy Partners to acquire oil properties in Atascosa County, Texas EV Energy Partners to acquire oil properties in Atascosa County, Texas
by: OilOnline
Tuesday, April 15, 2008
EV Energy Partners, L.P. has signed an agreement to acquire oil properties in South Central Texas for $18 million. The acquisition, which has been approved by the Board of Directors, is expected to close by the end of May 2008, and is subject to customary closing conditions and purchase price adjustments.
EVEP plans to initially finance the acquisition with borrowings under its existing credit facility.
John B. Walker, Chairman and CEO stated, "We are very pleased with this acquisition of producing assets that combine low decline rate oil production with good upside potential. This is the type of property we love to buy."
The properties include:
- 42 producing wells located located in the Charlotte Field, Atascosa County, Texas
- Estimated proved reserves as of March 1, 2008 (based on recent strip prices) of approximately 1.34 MMBOE
- 100% oil
- Operate 100% of the property value
- High net revenue interest averaging 82.5%; 95.0% average working interest
- Reserves-to-production ratio of 27 years
- Current net daily production of approximately 140 BOE
- Proved developed producing decline rate of approximately 4% per year
From the date of closing through 2008, EVEP expects the following for the properties to be acquired:
| Net daily production (BOE) |
|
|
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125 - 145 |
| Lease operating expenses, per BOE |
|
|
|
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$24 - $28 |
| Production taxes (as percent of revenues) |
|
|
|
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4.6% |
| Price differential vs NYMEX ($/Boe) |
|
|
|
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($1.50) - ($2.00) |
| Incremental general and administrative expense ($thous) |
|
|
|
|
$125 - $150 |
Through 2010, EVEP expects to spend approximately $4.5 million in capital, with production increasing at approximately 10% per year over the next two years.
In addition, EVEP has added additional NYMEX crude oil hedges through 2012 as follows:
| |
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Volume |
|
|
|
Swap Price |
| |
|
|
|
Bbl / day
|
|
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$ per Bbl
|
| May - Dec 2008: |
|
|
|
150 |
|
|
|
$ |
106.85 |
| 2009: |
|
|
|
150 |
|
|
|
$ |
102.10 |
| 2010: |
|
|
|
150 |
|
|
|
$ |
99.90 |
| 2011: |
|
|
|
150 |
|
|
|
$ |
98.55 |
| 2012: |
|
|
|
150 |
|
|
|
$ |
98.25 |
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