Gastar Exploration has expanded its presence in the STACK play of Oklahoma by increasing its stake in a set of wells and acreage for $51.4 million. Prior to the deal, the company held an interest in most of the of the acquired producing wells and leasehold.
The acquisition included additional working and net revenue interests in 66 gross (9.5 net) producing wells and 5670 net acres of leasehold in Oklahoma’s Kingfisher County.
Current net production associated with the acquired well interests is about 330 barrels of oil equivalent per day (49% oil) and 57% of the acreage is currently held-by-production.
The deal brings Gastar’s position in the Stack to 62,370 net surface acres.
“Acquiring additional working interest within our core Stack position in leases that Gastar currently owns and operates is an attractive approach to creating additional value,” chief executive Russell Porter said.
“Approximately 48% of the additional interest is in leases that are within our joint development agreement area and as a result, Gastar will earn a 10% drilling promote on those additional interests that are drilled within the joint venture.”
The acquisition was funded through a tack-on issuance of $75 million in convertible notes to funds managed by Ares Management.
The acquisition price of $51.4 million has an effective date of March 1, 2017 and is subject to customary final closing adjustments.
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Gib Knight is a private oil and gas investor and consultant, providing clients advanced analytics and building innovative visual business intelligence solutions to visualize the results, across a broad spectrum of regulatory filings and production data in Oklahoma and Texas. He is the founder of OklahomaMinerals.com, an online resource designed for mineral owners in Oklahoma. ☞Email:g.knight@oklahomaminerals.com
