Friday, August 2, 2013

Zenergy To Sell Its Operations In The Bakken -- August 2, 2013


September 5, 2013: The Deal/Pipeline is reporting:
Houston oil and gas explorer Oasis Petroleum Inc. said Thursday it had signed four separate and unrelated purchase and sale agreements to acquire properties in the Williston Basin of North Dakota totaling 161,000 net acres for $1.515 billion.
Zenergy Inc. is the seller of the biggest chunk, 136,000 net acres in and around Oasis' position in the West Williston project area for $1.45 billion, according to people familiar with the industry. One of the sellers for the three other unrelated purchase and sale agreements, which include properties in the East Nesson totaling 25,000 net acres for $65 million, was Magnum Hunter Resources Corp., those sources said. Magnum Hunter revealed in a regulatory filing Wednesday that it had sold a package in Burke County, N.D., to Oasis for $32.5 million in cash.
Oasis said the acquisitions will give it 492,000 net acres in the area, up 50%, with reserves of 169.9 million barrels of oil equivalent and production of 43,000 barrels of oil equivalent per day based on internal operational reports.
$1.515 billion / 161,000 acres = $9,400/acre.   

Original Post

The Wall Street Journal is reporting:
Closely held oil producer Zenergy Inc. has enlisted bankers to shop its North Dakota drilling fields, which would likely fetch more than $1 billion if they are sold, according to people familiar with the matter.
Tulsa, Okla. based Zenergy, formerly known as Zinke & Trumbo Ltd., was incorporated in 1982, according to Oklahoma business records. Its former name came from its founders, David Trumbo and Robert Zinke, who currently runs the company.
Zenergy is one of the last remaining closely held producers in North Dakota’s Williston Basin, an area where shale drilling has been responsible for much of the surging U.S. oil output. Zenergy currently has two rigs drilling wells in the state and had a hand in producing more than 3.2 million barrels of oil and four billion cubic feet of natural gas there in 2012, according to North Dakota Department of Mineral Resources data.
The article did not mention, and I don't think I have any data, regarding how much acreage Zenergy has.

At $5,000/acre = $1 billion could represent about 200,000 acres, which seems a bit on the  high side considering KOG has about 196,000 acres. So, either Zenergy has a lot of acres, or they will get a premium for the acreage they have. Yes, I know the deal will be more than just acreage; there is already production, and the deal may include some other assets. 

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