A joint venture of Denver-based startup FourPoint Energy LLC and privately held institutional affiliates of EnerVest Ltd., Houston, has agreed to acquire all of the oil and gas properties and related midstream assets in the western Anadarko basin belonging to Linn Energy LLC, Houston, for $1.95 billion, of which $975 million is net to FourPoint. The acquisition is expected to close on or before Dec. 15.
The JV will receive an interest in 1,358 producing wells primarily in the Granite Wash, Tonkawa, Cleveland, and Marmaton formations with net production of 195 MMcfd of gas equivalent. The assets cover more than 145,000 net acres throughout western Oklahoma and the Texas Panhandle, 97% of which are held by production.
The deal also includes 170 miles of gas gathering and compression systems, liquid stabilization, associated water supply and disposal infrastructure, and an oil terminal facility in Wheeler County, Tex.
FourPoint says the integrated midstream assets combined with the partnership’s proximal midstream assets in Hemphill and Roger Mills counties will provide price optionality and uninterrupted takeaway for the JV’s oil and gas volumes as well as serve as a platform for third-party volume growth.
“This transaction uniquely complements the partnership’s current acreage position by materially increasing our scale in ownership throughout our liquids-rich core area,” said George Solich, FourPoint Energy president and chief executive officer.
“The Linn assets will transform the joint venture's current operatorship profile within producing wells, add a significant inventory of operated upside locations, provide access to higher value oil and gas markets and afford control of capital allocation. Additionally, we have identified several cost synergies and strategic opportunities that will be pursued as we develop the asset base,” added Solich.
Following closing of the deal, the JV will hold more than 325,000 net acres in the established AMI with net production estimated at more than 315 MMcfed. The companies expect strong growth while spending within free cash flow and continuing to exploit the multiyear drilling inventory associated with the combined asset base.
FourPoint is a private E&P firm launched by the leadership team of Cordillera Energy Partners following its 2012 acquisition by Apache Corp. (OGJ Online, Jan. 23, 2012).
