American Energy - Woodford LLC (AEW) has snatched up 120,000 net acres in central northern Oklahoma from multiple sellers for $680 million.
AEW, an affiliate of Aubrey McClendon's Oklahoma City-based American Energy Partners LP, is planning to acquire a massive acreage position within the Woodford/Mississippi Lime.
AEW announced Feb. 24 it had raised $500 million in equity commitments and secured $180 million in bank borrowings to pursue a business plan focused on the Woodford shale/Mississippi Lime combination play. AEW named the area the CNOW play to stand for central northern Oklahoma Woodford.
Financing proceeds will be used to acquire the leasehold, which has production of 6,000 net barrels of oil equivalent per day (BOE/d) from Calyx Energy LLC, Calyx Energy II LLC, Liberty Energy LLC and Truevine Operating LLC. AEW’s goal is to build a leasehold position of up to 200,000 net acres in the CNOW play.
American Energy made waves earlier this year after it acquired 130,000 net acres in the southern Utica shale play from Exxon Mobil Corp. (NYSE: XOM) and Hess Corp. (NYSE: HES). The acquisition brought American Energy’s holdings in the Utica to 260,000 net acres, among the largest in the industry.
About 90% of the holdings are located in the core of the play, defined as southern Jefferson, Belmont, eastern Guernsey, Harrison, Monroe and Noble counties, Ohio. The company plans to drill 2,700 gross wells and 1,600 net wells on the acreage during the next decade.
AEW's exclusive private equity investor is Houston-based The Energy & Minerals Group (EMG) and additional equity commitments have been provided by AEW management and others. AEW's bank credit facility is led by Texas Capital Bank.
EMG manages a family of funds that invest in the energy and minerals sectors and have over $8.4 billion of assets under management.
Commercial Law Group and Andrews Kurth LLP provided legal representation to AEW and Baker Botts LLP provided legal representation to EMG. Calyx Energy LLC and Calyx Energy II LLC were both backed by the Los Angeles-based Kayne Anderson Energy Funds and Liberty Energy LLC is managed by Boston-based Old Ironsides Energy.
McClendon co-founded Chesapeake Energy Corp. (NYSE: CHK) in May 1989 and built it into one of the top drilling companies until his resignation in April.
During his leadership, Chesapeake discovered the Haynesville shale, Utica shale, Powder River Niobrara shale, Tonkawa Sand and Mississippi Lime unconventional plays.
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