[Editor's note: This article has been updated to clarify that only Haynesville Shale interests were sold.]
GEP Haynesville LLC purchased 5,256 net acres in Red River Parish, La. in the Haynesville Shale from Sabine Oil & Gas Corp. in a $45 million deal, Sabine said.
Sabine, which exited Chapter 11 bankruptcy in August 2016, sold the position on June 12, according to BMO Capital Markets, which marketed the assets for Sabine.
Interest in the Haynesville has recently surged, increasing rig counts and A&D activity.
As of June 23, Baker Hughes Inc. (NYSE: BHI) reported 40 rigs in the Haynesville compared to 19 a year ago. BP Plc (NYSE: BP) ramped up to five rigs in the Haynesville and has layered on hedges, “which means it won't cut rig count,” Tudor, Pickering, Holt & Co. said.
The Haynesville has also seen a steady string of deals.
In May, Goodrich Petroleum Corp. (NYSE MKT: GDP) said it would acquire 2,200 net acres as it focuses its efforts on the play. In February, Chesapeake Energy Corp. (NYSE: CHK) also closed two divestitures in the Haynesville—to Covey Park Energy LLC and Indigo Minerals LLC—for a total of about $915 million.
Sabine’s acreage, which is 100% HBP, averaged production of more than 9.4 million cubic feet equivalent per day (MMcfe/d) in the past 12 months. Production could increase to 228 MMcfe/d by the end of 2018 with ongoing development, BMO said.
The acreage position offsets more than 10 Bcfe of Haynesville wells drilled on assets acquired by privately funded GeoSouthern Energy Corp. from Encana Corp. (NYSE: ECA) in 2015 for $850 million.
GEP Haynesville, a joint venture formed by GeoSouthern and GSO Capital Partners LP, was created to acquire Encana’s 112,000 net leasehold acres in the Haynesville. Collectively, the acreage represented Encana’s total position in northern Louisiana.
In its deal with Sabine, GEP will acquire about 19 net horizontal Haynesville locations.
Sabine purchased the acreage as part of an all-stock merger with Forest Oil Corp. in December 2014 valued at roughly $1.1 billion.
Darren Barbee can be reached at dbarbee@hartenergy.com.
Recommended Reading
Texas LNG Export Plant Signs Additional Offtake Deal With EQT
2024-04-23 - Glenfarne Group LLC's proposed Texas LNG export plant in Brownsville has signed an additional tolling agreement with EQT Corp. to provide natural gas liquefaction services of an additional 1.5 mtpa over 20 years.
US Refiners to Face Tighter Heavy Spreads this Summer TPH
2024-04-22 - Tudor, Pickering, Holt and Co. (TPH) expects fairly tight heavy crude discounts in the U.S. this summer and beyond owing to lower imports of Canadian, Mexican and Venezuelan crudes.
What's Affecting Oil Prices This Week? (April 22, 2024)
2024-04-22 - Stratas Advisors predict that despite geopolitical tensions, the oil supply will not be disrupted, even with the U.S. House of Representatives inserting sanctions on Iran’s oil exports.
Association: Monthly Texas Upstream Jobs Show Most Growth in Decade
2024-04-22 - Since the COVID-19 pandemic, the oil and gas industry has added 39,500 upstream jobs in Texas, with take home pay averaging $124,000 in 2023.
What's Affecting Oil Prices This Week? (Feb. 5, 2024)
2024-02-05 - Stratas Advisors says the U.S.’ response (so far) to the recent attack on U.S. troops has been measured without direct confrontation of Iran, which reduces the possibility of oil flows being disrupted.