Midstates Petroleum Co. Inc., Houston, plans to buy Mississippi lime assets in Oklahoma and Kansas from Eagle Energy Production LLC in a cash-stock deal worth $650 million. The acquisition will add 103,000 net acres of which 84,000 are in the Mississippi lime play with 78,000 in Oklahoma and 6,000 in Kansas.
The remaining 19,000 acres are in the Hunton play in Oklahoma. Closing is expected by Oct. 1 with an effective date of June 1, Midstates said. Eagle Energy is a private exploration and production company having financial backing from Riverstone Holdings LLC.
John Crum, Midstates chief executive officer and president, “The properties we are acquiring in the Mississippian lime play are particularly appealing because they are in a market-recognized, emerging horizontal oil play with good predictability and solid economics.”
The transaction is expected to add 37 million boe of proved reserves of which 35% are oil and 23% natural gas liquids, with 35% of the total assets being producing properties.
Midstates is acquiring 114 gross producing wells that are 85% operated with an average 67% working interest. Net current daily production from the properties is 7,000 boe/d.
Including the new assets, Midstates will have an oil-weighted proved reserve base of 63.2 million boe of which 45% will be oil, 20% NGLs, and the rest will be gas. About 41% of total reserves will be proved developed.