QEP Energy Co. is selling Western Anadarko Basin assets primarily located in the Texas Panhandle and Western Oklahoma.
QEP prefers to sell the properties in a single cash transaction, but will consider offers on two packages: The Cana-Woodford/Stack, with a proved developed producing (PDP) net PV10 value of $386.7; and the Granite Wash, with a PDP net PV10 value of $133.7 million.
BMO Capital Markets has been retained as exclusive financial advisor to QEP Energy, a subsidiary of QEP Resources Inc. (NYSE: QEP).
The properties offer opportunities for new entrants or existing players looking for bolt-on acquisitions in two sizable, liquids-rich producing areas.
Net production is 103 million cubic feet equivalent per day (MMcfe/d), of which 39% is liquids. Net monthly cash flow was $14 million based on January estimates.
QEP intends a complete exit from the Cana-Woodford/Stack and Granite Wash areas, offering for sale leases, overrides, royalties and minerals. The assets have substantial production base with significant growth opportunity.
The offer comprises an estimated 160,000 net acres. Operated production is 58% of net rate averaging 70% working interest and 57% net revenue interest.
The Cana-Woodford/Stack location has more than 400 locations in the oil-prone stack play. Operators have successfully adopted eight wells per development section using pad drilling in the Cana-Woodford.
The package offers net production of 324 MMcfe/d with $22.3 million monthly net cash flow by 2018.
Cana-Woodford/Stack Package — Reserves Summary | |||||
Category | Count | BCFE | Liquids % | Capex ($MM) | Net PV10 ($MM) |
Total Proved Developed | 795 | 276 | 37% | $80.5 | $420.3 |
Tier 1 Undeveloped | 1,069 | 1,079 | 61% | $2,403.1 | $822.4 |
Other Undeveloped | 1,964 | 981 | 56% | $2,052.5 | $500.8 |
Grand Total | 3,828 | 2,336 | 56% | $4,536.1 | $1,743.4 |
The Granite Wash includes significant horizontal development with 1,095 Tier 1 locations. It has more than 20 stacked oil and liquids-rich zones. The package offers net production of 206 MMcfe/d with $9.4 million per month net cash flow by 2018.
Granite Wash Package — Reserves Summary | |||||
Category | Count | BCFE | Liquids % | Capex ($MM) | Net PV10 ($MM) |
Total Proved Developed | 646 | 73 | 36% | $0.7 | $134.0 |
Tier 1 Undeveloped | 1,095 | 699 | 53% | $1,108.7 | $482.1 |
Other Undeveloped | 582 | 423 | 48% | $885.2 | $58.3 |
Grand Total | 2,323 | 1,195 | 50% | $1,994.6 | $674.4 |
Data rooms opened Feb. 20. Final offers are due by March 27. Linda Fair (713-546-9748) will contact interested parties to schedule a data room appointment after receipt of a signed confidentiality agreement.
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