Terra Energy Partners to Acquire Piceance Basin Assets from WPX Energy
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Terra Energy Partners LLC has agreed to acquire WPX Energy Rocky Mountain, LLC from WPX Energy, Inc. for $910 million in cash. In addition, Terra will receive natural gas hedges with a current in-the-money value of more than $90 million that will be used to support cash flow in 2016 and 2017. In exchange for these hedges, Terra has agreed to assume approximately $100 million of WPX’s future firm transportation obligations extending to 2022. The parties expect to close the transaction in the second quarter.
The acquired assets consist of an approximate 200,000 net acre position in the Piceance Basin of Colorado boasting recent net production of approximately 500 million cubic feet equivalent per day. Terra estimates that the assets contain approximately 2 trillion cubic feet equivalent of proved developed producing (PDP) reserves and an extensive inventory of low-risk drilling locations. The assets also include deep rights across approximately 150,000 net acres prospective for the emerging horizontal Mancos-Niobrara play.
“We are excited to announce our first acquisition since forming Terra last summer. The Piceance Basin is an area that we know well and one that we believe offers considerable upside potential through focused management. We are looking forward to working with our equity sponsors Kayne and Warburg Pincus to create value in the years to come,” said Michael S. Land, chief executive officer of Terra Energy Partners.
About Terra Energy Partners
Founded in 2015, Terra Energy Partners is a privately held oil and natural gas exploration and production company based in Houston, Texas. Terra is focused on the acquisition and development of large, long-lived producing oil and gas assets in North America. The Terra management team is led by Michael S. Land, the former president of the Permian and Mid-Continent Business Units at Occidental Petroleum Corp. Michael has assembled a deep management team with experience across multiple basins in North America, including the Piceance. Terra is a portfolio company of Kayne Anderson and Warburg Pincus and is backed by an $800 million equity commitment to pursue its strategy.
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