EV Energy Partners Announces a $59 Million Acquisition in the Eagle Ford and a $52 Million Divestiture in the Barnett Shale
February 01 2017 - 4:15PM
EV Energy Partners, L.P. (NASDAQ:EVEP) today announced that on
January 31, 2017, it closed on an acquisition of Eagle Ford oil and
natural gas properties in Karnes County, TX for $58.7 million
(before post-closing purchase price adjustments).
Additionally, the Partnership announced the divestiture of a
portion of its Barnett Shale natural gas properties for $52.1
million (before post-closing purchase price adjustments).
Proceeds from the Barnett Shale divestiture, which closed on
December 1, 2016, were deposited into a 1031 ‘like-kind’ exchange
account. The acquisition was funded with $52.1 million of
proceeds from the 1031 ‘like-kind’ exchange account and $6.6
million of borrowings under the Partnership’s revolving credit
facility.
As part of the Eagle Ford acquisition, EVEP acquired a 5.8
percent working interest in 9,151 gross acres (529 net acres) in
Karnes County, TX from a third party. Certain EnerVest
Institutional Partnerships (EnerVest) own an 87 percent working
interest in and EnerVest acts as operator of the properties.
Acquisition Highlights:
- Includes Eagle Ford and Austin Chalk reserves and drilling
opportunities
- Estimated proved reserves of approximately 6.4 Mmboe and
probable reserves of 1.3 Mmboe, net to EVEP (based on recent strip
prices)
- 22 percent proved developed and 61 percent crude
- Current net daily production of approximately 1.0 Mboepd (73
percent crude)
- Over 200 economic, scalable and repeatable proved and probable
horizontal drilling opportunities
- Additional possible drilling locations
- Attractive drilling economics at current strip prices
- Significantly higher margins and higher cash flow from acquired
Eagle Ford Shale properties as compared to the divested Barnett
Shale properties (based on recent strip prices)
The Partnership’s Barnett Shale divesture represented estimated
proved reserves of 94.6 Bcf of dry gas (based on recent strip
prices) and approximately 13.0 Mmcfpd of natural gas
production. Based on year end 2015 SEC proved reserves, the
divested properties represented 16 percent of EVEP’s existing
Barnett
position. “We
are pleased to complete this tax efficient sale and subsequent
acquisition of properties. We believe that this position in
the Eagle Ford Shale affords many attractive, self-funding, near
term drilling opportunities and will increase our crude production
by approximately 25 percent in 2017,” stated Michael Mercer,
President and Chief Executive Officer.
About EV Energy Partners, L.P.
EV Energy Partners, L.P. is a master limited partnership engaged
in acquiring, producing and developing oil and natural gas
properties. More information about EVEP is available on the
Internet at http://www.evenergypartners.com.
(code #: EVEP/G)
Forward Looking Statements
This press release may include statements that are not
historical facts which are "forward-looking statements" within the
meaning of the U.S. Private Securities Litigation Reform Act of
1995. These statements include information about, future plans, our
reserve quantities and the present value of our reserves, estimates
of maintenance capital and other statements which include words
such as "anticipates," "plans," "projects," "expects," "intends,"
"believes," "should," and similar expressions of forward-looking
information. Forward-looking statements are inherently uncertain
and necessarily involve risks that may affect the business
prospects and performance of EV Energy Partners, L.P. Actual
results may differ materially from those contained in the press
release. Such risks and uncertainties include, but are not limited
to, changes in commodity prices, changes in reserve estimates,
requirements and actions of purchasers of properties, exploration
and development activities, the availability and cost of financing,
the returns on our capital investments and acquisition strategies,
the availability of sufficient cash flow to pay distributions and
execute our business plan and general economic conditions.
Additional information on risks and uncertainties that could affect
our business prospects and performance are provided in the most
recent reports of EV Energy Partners with the Securities and
Exchange Commission. All forward-looking statements included in
this press release are expressly qualified in their entirety by the
foregoing cautionary statements.
Any forward-looking statement speaks only as of the date on
which such statement is made and EVEP undertakes no obligation to
correct or update any forward-looking statement, whether as a
result of new information, future events or otherwise.
In filings with the Securities and Exchange Commission, we are
required to report proved reserves as defined in Regulation S-X
under the Securities Act. In general, Regulation S-X requires that
in calculating proved reserves we use the unweighted average of the
price of crude oil and natural gas on the first day of each month
for the twelve months prior to the date of the report, without
escalation. The estimated net proved reserves attributable to the
Eagle Ford properties being acquired by the Partnership, using the
unweighted average price for the twelve months ended January 31,
2017 was $2.59 per Mmbtu of natural gas and $44.14 per barrel of
crude oil, are 5.8 Mmboe. The estimated net proved reserves
attributable to the Barnett Shale properties being divested by the
Partnership, using the unweighted average price for the twelve
months ended November 31, 2016 was $2.38 per Mmbtu of natural gas,
are 78.9 Bcf.
Our reserves based upon strip prices were estimated using
definitions and guidelines established by the SEC but calculated
using prices for oil and natural gas based on average annual NYMEX
forward-month contract pricing in effect on December 1, 2016 and
January 26, 2017 to better reflect the market expectations as of
that date. Pricing was adjusted for basis differentials by field
based on our historical realized prices. The NYMEX strip price for
proved reserves are intended to illustrate reserve sensitivities to
market expectations of commodity prices and should not be confused
with “SEC Pricing”
The United States Securities and Exchange Commission ("SEC")
permits oil and gas companies, in their filings with the SEC, to
disclose only proved, probable and possible reserves, as defined by
the SEC. We use the terms estimated ultimate recovery and gas in
place which are descriptions of volumes of hydrocarbons potentially
recoverable through additional drilling or recovery techniques that
the SEC's guidelines strictly prohibit us from including in filings
with the SEC. These estimates are by their nature more speculative
than estimates of reserves and accordingly are subject to
substantially greater risk of actually being realized by the
Company. Investors are urged to consider closely the disclosure in
our SEC filings, available on our website or from the SEC’s website
at www.sec.gov.
EV Energy Partners, L.P., Houston
Nicholas Bobrowski
713-651-1144
http://www.evenergypartners.com