Houston-based E&P Alta Mesa Eagle LLC will bid farewell to the Eagle Ford Shale, agreeing to sell its interests to ReOil Eagle I LLC for up to $210 million, the company said Dec. 12.
Alta Mesa, a subsidiary of Alta Mesa Holdings LP, will initially be paid $175 million, with an additional $25 million to be paid upon the drilling of 10 upper Eagle Ford Shale wells and another $10 million if the calendar year 2016 NYMEX strip closes above $80 per barrel for two consecutive months in 2015.
According to Alta Mesa’s website, the company acquired Texas interests located primarily in Karnes County’s Eagleville Field, as well as parts of of Goliad and DeWitt counties in 2010.
The company owns an average 21-25% working interest in the field. The wells are primarily operated by Murphy Oil Corp. (NYSE: MUR), which has a 120-well development program with potential down-spacing and up to three drilling rigs for the next two years. The company also has a fully-equipped hydraulic fracturing crew and a coil tubing unit to the area, according to the website.
At the end of 2013, the properties had 7.3 million barrels of oil equivalent in reserves valued at $218 million dollars on the SEC price deck, according to a release. The properties are nonoperated.
"We are pleased to be working with ReOil on this transaction and look forward to continuing our relationship with them," said Hal Chappelle, Alta Mesa Holdings president and CEO. "This strategic divestiture sharpens our operational focus."
The deal is expected to close in mid-January with has an effective date of Sept. 1.