KKR to Buy Barnett Shale Properties from Carrizo
Wednesday, April 27, 2011
Kohlberg Kravis Roberts & Co. L.P.
Kohlberg Kravis Roberts & Co. L.P. (together with its affiliates, KKR) announced that KKR has entered into a definitive agreement to acquire certain Barnett Shale properties from Carrizo O&G for $104 million. The transaction, which is expected to close in mid-May, is being made through KKR Natural Resources (KNR), KKR's partnership with Premier Natural to pursue investments in North American oil and gas properties. The transaction is the third investment made by KNR and, following the acquisition of certain properties from ConocoPhillips in January, the second investment made by KNR in the Barnett Shale.
Located in North Central Texas and producing out of the Barnett Shale formation, the Assets contain 122.4bcfe of total net proved reserves (based on a third party estimate) and comprise 75 gross (58.5 net) wells currently producing at a gross rate of 15.7mmcfe/d (8.3 mmcfe/d net).
"With their significant proved developed producing reserve component in a reservoir we know well through our current operations in the region, the assets are a great fit for our KKR Natural Resources platform. We are pleased to add these assets to our oil and gas portfolio and remain excited about the opportunity to grow the KNR platform through the acquisition of additional oil and gas properties in North America," said Jonathan Smidt, a Member at KKR and a senior member of KKR's Energy and Infrastructure business.
KKR announced its partnership with Premier in February, 2010. Founded in June 2006 by former executives of Vintage Petroleum, Inc., Premier currently operates a portfolio of assets located in the Barnett Shale, the Texas Gulf Coast and the Permian Basin and has experience operating assets in most of the major producing basins in the United States.
The probable reserves associated with this acquisition are approximately 100 Bcfe. The resource potential for the acquisition based on 58.5 net locations and 1.8 Bcf/well is estimated to be approximately $105 Bcf.
ReplyDeleteThe probable reserves can be valued at $17 million based on $1/boe. The rest of the deal value could be assigned for proved reserves which gives the production metrics to be ~$62,000/flowing barrel (~$10,000/flowing mcfe) whereas peers value the reserves or production at $75,000/flowing barrel (~$12,500/flowing mcfe).