Ascent Resources Strengthens Position in Utica
OKLAHOMA CITY — Ascent Resources has entered into definitive agreements to acquire natural gas and oil properties in the Utica shale totaling $1.5 billion.
The company, formed by the late wildcatter Aubrey McClendon, said Friday that the deal encompasses holdings from Hess Corp., CNX Resources, Utica Minerals Development, and a fourth undisclosed seller.
The deals are expected to close in the third quarter, and would be funded with a combination of at least $965 million in common equity and no more than $535 million borrowed from Ascent’s revolving credit facility.
Details of the acquisition include 113,400 net leasehold acres and royalty interests on approximately 69,400 fee mineral acres, spanning the dry gas, wet gas, and oil windows in the over-pressured core of the Utica, the company said.
The deal also involves the acquisition of 93 operated wells and net production of approximately 216 million cubic feet of natural gas per day, 19% of which are liquids. In addition, Ascent would receive 380 horizontal well locations and increased working interest in more than 900 horizontal well locations.
“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,” Jeff Fisher, chairman and CEO, said in a statement. “”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 U.S. in terms of asset size and net production.”
Fisher said the acreage is mostly contiguous with property leased by Ascent, which will allow the company to drill longer laterals and achieve other efficiencies. “The acquisition solidifies the company’s position as a low-cost producer, expands our operating margins and maintains our current expectations to achieve positive free cash flow in 2019.”
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