Exploration

Ascent Resources spends $1.5B to grow Utica position

Ascent Resources

Ascent Resources said Friday it’s spending $1.5 billion for oil and natural gas assets in Ohio’s Utica Shale Play, deals that will make the independent producer one of the U.S.’s largest privately-held exploration and production companies.

Deals were signed with CNX Resources and its joint-venture partner in the sold assets, Hess Corp., Utica Mineral Development (a portfolio company of private equity firm First Reserve), and a fourth, unnamed seller.

Ascent Resources, founded by U.S. shale pioneer, and the founder and former CEO of Chesapeake Energy, the late Aubrey McClendon, in 2013, said its acquisitions include:

* Roughly 113,400 net leasehold acres, and royalty interests on approximately 69,400 fee mineral acres, including all three hydrocarbon windows in the over-pressured core of the Utica
* 93 operated wells and net production of roughly 216 million cubic feet equivalent per day (MMcfe/d) (19% liquids)
* More than 380 gross incremental horizontal well locations and an increased working interest in more than 900 gross horizontal well locations
* Proved reserves and total resources of approximately 1.1 trillion cubic feet-equivalent (Tcfe) and 5.6 Tcfe, respectively

Ascent Resources chairman and CEO Jeff Fisher said: “The combination of these accretive bolt-on acquisitions is a milestone for the company and has been made possible by our outstanding operational success in the Utica Shale.

“We continue to consistently deliver basin-leading well results through our best-in-class operations and after completion of these acquisitions, we will become one of the largest privately held E&P companies in the US in terms of asset size and net production.”

“The acquired assets, more than 60% of which are fee mineral acres, further establish the company as a compelling Utica pure play and will significantly enhance the company’s growth and equity value.”

The company noted that the assets are largely contiguous with its existing acreage, with an opportunity to further improve capital efficiency.

Following the completion of the deals, which is anticipated in the third quarter of this year, Ascent is expected to have greater exposure to liquids.

Additionally, and not inclusive of the acquisitions, Ascent Resources said it closed June 28 on an amendment to its revolving credit facility increasing the borrowing base to $1.4 billion and the size of the credit facility to $2.5 billion. Ascent will engage its lenders to redetermine the borrowing base, inclusive of the acquisitions, in the third quarter, according to the company press release.

A good chunk of Ascent’s acquisitions included the purchase of Ohio Utica joint venture (JV) assets owned by Hess and CNX Resources.

The JV assets consist of about 78,000 net acres including 52,000 net undeveloped acres in the wet gas Utica Shale areas of Belmont, Guernsey, Harrison and Noble counties, Ohio.  Both Hess and CNX agreed to individually sell their 50% stake in the JV to Ascent for $400 million each, bringing the total value for the assets to $800 million.

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