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Atlas Resource Partners enters Eagle Ford through acquisition of oil rich production

PITTSBURGH, Pennsylvania -- Atlas Resource Partners (ARP) is to acquire oil assets in the Eagle Ford shale in south Texas for $225 million. The assets consist of 22 producing wells and 19 undeveloped locations containing estimated net reserves of approximately 12 MMboe.

 

ARP' s Board of Directors has approved the transaction, which is expected to close in the fourth quarter of 2014 with an effective date of Jul. 1, 2014.

 

In connection with the acquisition, Atlas Energy’s E&P development subsidiary will purchase eight wells that have been drilled but not completed and 53 undeveloped drilling locations for approximately $115 million, which is to be paid in the twelve months following closing.

 

ARP will acquire oil-rich production in Atascosa County, Texas, located in the oil window of the Eagle Ford shale. The production is comprised of approximately 87% oil, 7% natural gas liquids and 6% natural gas from 22 producing wells, from which ARP expects net daily production to average approximately 1,900 boed in 2015. ARP' s oil and liquids production is expected to increase as a result of the acquisition to approximately 25% of ARP' s total daily oil and gas production.

 

In addition to the oil-producing assets, ARP will acquire 19 undeveloped drilling locations in the Eagle Ford position. ARP expects that these drilling locations will provide valuable inventory for ARP' s investment partnership business. The Eagle Ford assets also have contracted agreements for gathering and processing capacity as well as salt water disposal.

 

"This transaction demonstrates the ability of the Atlas companies to acquire high-margin production in a premier U.S. oil and gas basin without diluting common unit holders' interests. We expect this transaction to immediately enhance ARP' s cash flow, distribution coverage and credit metrics, providing additional visibility and growth," Edward E. Cohen, CEO of ARP, said.

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