Elk to buy Resolute Energy’s Greater Aneth EOR unit

Sept. 18, 2017
Sydney-based Elk Petroleum Ltd. has agreed to acquire a subsidiary of Resolute Energy Corp., Denver, including its 63% interest in Greater Aneth oil field in the Paradox basin of southeastern Utah, for $160 million.

Sydney-based Elk Petroleum Ltd. has agreed to acquire a subsidiary of Resolute Energy Corp., Denver, including its 63% interest in Greater Aneth oil field in the Paradox basin of southeastern Utah, for $160 million.

Aneth field, located on Navajo Nation lands and owned by Navajo Nation Oil & Gas Co., is one of the largest carbon dioxide enhanced oil recovery projects in the Rocky Mountains with a 30-year operating history and 450 million bbl of cumulative production to date.

The purchase for Elk comprises 2P oil reserves of 59 million bbl and oil production of 6,500 b/d effective Oct. 1. Elk will become operator and has the potential to retain Resolute’s Aneth operating team.

Elk says the deal, which is expected to close in late October, achieves its growth plan to own and operate CO2 projects, Grieve and Aneth fields, as well as CO2 supply, Madden field, in the Northern Rockies.

For Resolute, the sale marks the final step in its transformation “into a pure-play Delaware basin company,” said Rick Betz, Resolute chief executive officer.

Resolute’s current 2017 production guidance is 24,000-28,000 boe/d. Assuming the deal closes by Nov. 1, the company’s 2017 production will be reduced by 1,000 boe/d. Its July production was 29,500 boe/d companywide with 23,600 boe/d in the Permian.

Resolute has 21,000 net acres in Reeves County, Tex., where it targets the Wolfcamp A and B. The company says it has drilled more than 30 horizontal Wolfcamp wells, has 415 gross operated Wolfcamp locations, and has at least 10 years of drilling inventory.

Contact Matt Zborowski at [email protected].