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Editor's note: This article has been updated to correct Quanah Energy's location. The company is based in Oklahoma City, Okla.
Canyon Creek Energy – Arkoma LLC continues to stretch its acreage Arkoma Stack position and inventory, saying this month it had purchased assets from Quanah Energy LLC.
The financial details of the transaction weren’t released. Canyon Creek said it added 50,000 gross acres of liquids-rich acreage in the Mississippian and Woodford shale plays in Oklahoma. The company now holds more than 100,000 acres across 160 operated drilling units in the Arkoma Stack play.
The acquisition also increases Canyon Creek’s inventory of horizontal drilling locations to nearly 1,300.
Canyon Creek said Jan. 17 it purchased Quanah Energy, based in Oklahoma City, Okla., but a Canyon Creek company official said it isn’t clear if the company has other assets.
Canyon Creek President and CEO Luke Essman said the company continues to realize exceptional drilling and completion results across the Arkoma Stack. The company operates or has permitted about 15 wells with the ability to drill up to 10,500-ft horizontals, most in Coal County, Okla., according to the most recent permits available from the Oklahoma Corporation Commission.
“We are particularly excited about this acquisition as it fits nicely with our existing acreage footprint and will allow for the efficient continued development of our resource,” Essman said in a news release.
The company's acquisition follows a July purchase of 30,000 acres in the Arkoma Stack play from Arkoma Leasing LLC.
Late last year, Essman said deals had been slow moving. In September, Essman told attendees of Hart Energy’s DUG Midcontinent conference he would be focused on what was selling near his assets and how to acquire the leasehold.
The driver of such transactions has been public companies with older horizontal assets, Essman said. The public companies acquired their legacy-held positions and developed them in the initial horizontal boom in the Arkoma Basin.
“They’re slow to unload those assets principally because there are small companies like us that are coming back exploring different benches in the basin, and they’d like to participate in some of that upside at least in the peripheral,” he said.
At the time, a few transactions had started to move but Essman said an A&D “gridlock” remained because more capital was flowing into the basin and “sellers want to make sure they realize the full value from those assets.”
The region is also crowded with larger competitors such as Chaparral Energy Inc., which announced the sale of EOR assets in December for $170 million. Chaparral has said the company has focused on becoming a pure-play Stack E&P. The company anticipates having about 110,000 net acres.
Canyon Creek describes its position as a contiguous area that includes acreage in the liquids-rich window in Hughes, Pittsburg, Coal and Atoka counties, Okla. The company is a joint venture partnership between Canyon Creek management, private investors and Vortus Investment Advisors.
Darren Barbee can be reached at firstname.lastname@example.org.
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