By OGJ editors
HOUSTON, Apr. 18 -- Anadarko Petroleum Corp. has agreed, in separate transactions, to sell certain of its oil and gas production properties in Texas to several buyers, including EV Energy Partners LP (EVEP), for $750 million.
EVEP will pay $100 million for its share of an acquisition that involves 1,297 active wells (892 operated), producing primarily from the Austin Chalk formation in 10 counties in Central and East Texas.
The acquisition is expected to close by the end of June.
These properties are estimated to have a productive life of over 40 years and a reserves-to-production ratio of 8.1 years. They contain "significant probable and possible potential," EVEP said, adding that there are 75 currently identified proved undeveloped horizontal locations that will be drilled at lower cost through reentering existing vertical wells.
EVEP Chairman and Chief Executive John B. Walker said, "We believe the Giddings and Brookeland field assets that we are acquiring from Anadarko are mature yet have significant upside."
EVEP expects the properties will provide net production of 6.85-7.35 MMcfd of gas, 405-435 b/d of oil, and 495-535 b/d of natural gas liquids during second-half 2007. EVEP intends to enter into arrangements to hedge a substantial portion of the acquired production volumes at or prior to closing.
The company anticipates over 40% increase in cash flow for the second half of this year.