First Reserve portfolio company Mountaineer Keystone has closed its buy of PDC Mountaineer, a Marcellus joint venture between PDC Energy and Lime Rock Partners. The price of the acquisition was $500 million.
PITTSBURGH, Oct. 15, 2014 /PRNewswire/ — Mountaineer Keystone Energy, LLC (“Mountaineer Keystone” or the “Company”), a portfolio company of First Reserve, the largest private equity firm exclusively focused on energy, today announced that it has completed the acquisition of the equity interests in PDC Mountaineer LLC (“PDCM”), a Marcellus Joint Venture (“JV”) between PDC Energy, Inc. and Lime Rock Partners LLC, with an effective date of January 1, 2014, for an aggregate purchase price of $500 million.
The acquisition adds over 131,000 net acres to Mountaineer Keystone’s West Virginia Marcellus Shale position, approximately 65% of which is held-by-production. Pro Forma for the acquisition, the Company will have 181,000 net acres, proved reserves of nearly 650 Bcf and daily production of more than 50 Mmcfe/d.
As part of its transaction, the midstream assets of PDCM are being acquired and will be operated by MK Midstream Holdings, LLC, a JV 50% owned by the Company. The midstream assets consist of 24 miles of high pressure gathering lines with capacity to transport in excess of 100 Mmcfe/d.
Robert Kozel, President and Chief Executive Officer stated, “We are thrilled with the opportunity this acquisition creates. Our combined footprint offers immediate drilling opportunity, ample natural gas takeaway, and accelerates our five year development plan, which includes the drilling of more than 400 wells in our core development area and the build out of significant gathering and midstream assets.”
The Company’s Chief Financial Officer, Steve Bishop, added, “This is a truly transformative acquisition for our Company. Through this transaction, we have secured 300 Mmcfe/d of transportation to the attractive TCO-WB market through a project that will be completed in late 2015. Additionally, the funds raised through this process provide over $180 million of development capital, fully funding our operating plan through cash-flow self-sufficiency.”
About Mountaineer Keystone Holdings, LLC
Mountaineer Keystone is an Appalachian Basin oil and gas company headquartered in Pittsburgh, Pennsylvania that is engaged in the acquisition, exploration, development and production of oil, natural gas, and natural gas liquids.
About First Reserve
First Reserve is the largest global private equity and infrastructure investment firm exclusively focused on energy. With over 30 years of industry insight, investment expertise and operational excellence, the Firm has cultivated an enduring network of global relationships and raised more than USD $30 billion of aggregate capital since inception. First Reserve has completed more than 475 transactions (including platform investments and add-on acquisitions), and its portfolio companies have significant operations on six continents. These operations span the energy spectrum from upstream oil and gas to midstream and downstream, including resources, equipment and services and infrastructure.
First Reserve has offices in Greenwich, CT; Houston, TX; London, U.K. and Hong Kong. Please visit www.firstreserve.com for more information.