American Energy–Permian Basin LLC (AEPB), American Energy–Utica LLC (AEU), and American Energy-Marcellus LLC (AEM), all affiliates of Oklahoma City-based American Energy Partners LP (AEP), have each signed agreements to acquire acreage in the Permian, Utica, and Marcellus basins, respectively, in deals totaling $4.25 billion.
The moves mark the entry of AEP into the Permian and southern Marcellus. The company, which already has a presence in the Utica, was launched in April 2013 by former Chesapeake Energy Corp. Chief Executive Officer Aubrey K. McClendon “to capitalize on opportunities available in unconventional resource plays onshore in the US.”
The AELP platform over the past 9 months has raised $10 billion in committed equity and debt capital to fund the development of AEPB, AEU, AEM, as well as American Energy–Woodford LLC (AEW) and American Energy–NonOp LLC (AENO).
AEPB will acquire 63,000 net acres in the southern Permian basin, mostly in Reagan and Irion counties in Texas from affiliates of Enduring Resources LLC, Denver, for $2.5 billion.
AEPB says the properties are expected to have net production of 16,000 boe/d of oil, and it intends to increase its position in the basin with additional acquisitions over time.
Enduring is using 4 rigs to develop the acreage and AEPB plans to increase operated drilling activity to 6-8 rigs by yearend 2015. AEPB plans to drill as many as 2,500 gross wells and 1,750 net wells on its acreage over the next decade.
Marcellus, Utica deals
AEM will acquire 48,000 net acres in the Marcellus basin in Doddridge, Harrison, Marion, Tyler, and Wetzel counties in West Virginia from East Resources Inc. and an unnamed private company. The properties are expected to have net production of 135 MMcfd of gas equivalent.
The company says it plans to expand its position in the area over time. It intends to drill 410 gross wells and 355 net wells on its acreage in the coming years.
AEU also will acquire 27,000 net acres in Monroe County in Ohio in the Utica basin from East Resources and an unnamed private company. The properties are expected to have net production of 40 MMcfed.
This is AEU’s seventh major acquisition in the southern Utica, increasing the company’s position in the basin to 280,000 net acres, the area’s largest leasehold position.
AEU has invested more than $3.5 billion to date in the Utica and plans to drill 2,600 gross wells and 1,560 net wells on its acreage in the coming years.
The Utica and Marcellus transactions total $1.75 billion. Both deals are expected to close in the next 60 days. The sellers are using 2 rigs to develop the acreage. AEU and AEM plan to increase operated drilling activity to 4-6 rigs by yearend 2015.
Notably, East Resources was acquired in 2010 by Royal Dutch Shell PLC for $4.7 billion during Shell’s large-scale venture into US unconventional oil and gas (OGJ Online, May 28, 2010).