American Energy-Utica said Monday that it has agreed to acquire approximately 27,000 net acres in Monroe County, Ohio from East Resources and an unidentified private firm. Also, American Energy-Marcellus has inked agreements to buy about 48,000 net acreages in five West Virginia counties from the same sellers. The combined price of these acquisitions is $1.75 billion. Both transactions are expected to be completed in the next 60 days. Citi and Goldman Sachs served as financial advisors to AEU and AEM, while Jefferies was financial advisor to the sellers. American Energy-Utica and American Energy-Marcellus are both backed by The Energy & Minerals Group.
OKLAHOMA CITY, June 9, 2014 /PRNewswire/ — American Energy – Utica, LLC (AEU), an affiliate of American Energy Partners, LP (AELP), announced today that it has signed agreements to acquire approximately 27,000 net acres of leasehold in Monroe County, Ohio, from East Resources, Inc. and an unnamed private company. At closing, the properties are expected to have net production of approximately 40 million cubic feet of natural gas equivalent per day.
In addition, a separate AELP platform company, American Energy – Marcellus, LLC (AEM), announced today that it has signed agreements to acquire approximately 48,000 net acres of leasehold in Doddridge, Harrison, Marion, Tyler and Wetzel Counties, West Virginia, also from East Resources, Inc. and an unnamed private company. At closing, the properties are expected to have net production of approximately 135 mmcfe per day.
The combined acquisition price of the transactions is $1.75 billion, and both deals are expected to close in the next 60 days. The sellers are currently using two rigs to develop the acreage being acquired, and AEU and AEM plan to increase operated drilling activity to 4-6 rigs by year end 2015.
The Utica acquisition marks AEU’s seventh major acquisition in the southern Utica Shale play and boosts AEU’s leasehold in the play to approximately 280,000 net acres, the largest leasehold position in this rapidly developing and prolific play. AEU has invested over $3.5 billion in the Utica to date and plans to drill approximately 2,600 gross wells and 1,600 net wells on its acreage in the years ahead.
The Marcellus acquisition marks AEM’s entry into the southern Marcellus Shale play and establishes a strong foundation from which it plans to build a more significant leasehold position in the area over time. AEM plans to drill approximately 410 gross wells and 355 net wells on its acreage in the years ahead.
During the past nine months, the AELP platform has raised committed equity and debt capital of approximately $10 billion to fund the development of five play or strategy specific companies: American Energy – Utica, LLC (AEU), American Energy – Woodford, LLC (AEW), American Energy – NonOp, LLC (AENO), American Energy – Marcellus, LLC (AEM), and American Energy – Permian Basin, LLC (AEPB).
AEU and AEM’s lead equity investor is The Energy & Minerals Group (EMG), with additional equity provided by AEU and AEM’s management team and others, including First Reserve Corporation to AEU. Citi and Goldman, Sachs & Co. acted as financial advisors to AEU and AEM. Sullivan & Cromwell LLP, Commercial Law Group, P.C. and Porter Hedges LLP acted as legal advisors to AEU and AEM. Jefferies LLC acted as financial advisor to the sellers. Baker Botts L.L.P. acted as legal advisor to the sellers.
About American Energy Partners, LP:
American Energy Partners, LP was founded by Aubrey K. McClendon in April 2013 to capitalize on opportunities available in unconventional resource plays onshore in the U.S. For additional information, please visit www.americanenergypartners.com.
About The Energy & Minerals Group:
EMG is the management company for a series of specialized private equity funds. The Firm was founded by John Raymond (majority owner and CEO) and John Calvert in 2006. EMG focuses on investing across various facets of the global natural resource industry including the upstream and midstream segments of the energy complex. EMG has approximately $13.9 billion of regulatory assets under management (RAUM) and approximately $6.5 billion in commitments have been allocated across the energy sector since inception. For additional information, please visit www.emgtx.com.