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Evolution Acquires Non-operated Wyoming Natural Gas Interests
02/23/2022
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.
Enterprise acquires Navitas Midstream for $3.25 billion in cash
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Enterprise decided to go in on the Permian Basin. With the surprise purchase of Navitas Midstream for $3.25 billion in cash, the company gained a foothold in the Midland Basin, as it previously lacked #naturalgas or NGL infrastructure apart from downstream pipelines in the region. Enterprise estimates that distributable cash flow accretion will be in the range of $0.18 to $0.22 per unit in 2023, while simultaneously supporting additional capital returns to their limited partners through distribution growth and buybacks of common units.
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Rangeland Energy has agreed to sell Rangeland Midstream Canada to Kingston Midstream Alberta and remains committed to future Canadian midstream investments. Texas-based Rangeland Energy, supported by financial partner EnCap Flatrock Midstream, has inked a deal to sell its Canadian subsidiary, Rangeland Midstream Canada Ltd., to Calgary's Kingston Midstream Alberta Ltd. for cash.
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The merger between ONEOK and Magellan received approval from Magellan shareholders, securing just 55% of the total votes at Magellan’s meeting on Sept. 21. ONEOK Inc. has successfully concluded the acquisition of Magellan Midstream Partners LP on Sept. 25. The deal will bring together their respective assets and expertise, resulting in a powerful entity boasting an extensive network of approximately 25,000 miles of pipelines primarily focused on transporting liquids.
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Viper Energy's deal, comprised of cash and equity, secures an additional 2,800 net royalty acres in the Midland Basin and 1,800 in the Delaware Basin. Viper Energy Partners LP, a Diamondback Energy Inc. subsidiary, has inked a deal to acquire mineral and royalty interests in the Permian Basin. The deal, valued at around $1 billion, is with Warwick Capital Partners and GRP Energy Capital. Viper was established by Diamondback with the purpose of owning, purchasing, and capitalizing on oil and natural gas assets in North America, specifically targeting mineral and royalty interests.