leum Corp., The Woodlands, Tex., and
affiliates of New York City private equity firm KKR & Co. LP for $625 million.
The acquired acreage, which is
95% held by production, is in Burle-son, Brazos, Lee, Milam, Robertson,
and Washington counties of Texas
by WRD’s existing acreage position.
First-quarter 2016 net production
from the acreage was 7,600 boe/d,
of which 72% was oil and 89% liquids, from 68 Eagle Ford, 299 Austin
Chalk, and 19 Buda-Georgetown operated wells.
The new position includes 949 net
Eagle Ford locations and proved developed producing reserves of 22. 9 million boe, of which 73% is oil and 88%
liquids. The deal is effective Jan. 1 and
expected to close on or about June 30.
“This transformative acquisition
presented us with a strategic opportunity to consolidate our acreage
position,” said Jay Graham, WRD
chairman and chief executive officer.
“With a total of 385,000 net acres, we
have built a premier contiguous acreage base making us the second largest operator in the entire Eagle Ford
trend,” he said.
“WRD’s preacquisition drilling
schedule already includes 36 wells
immediately adjacent to the acquired
acreage. With the new acquisition,
WRD can further optimize pad location and development planning with
fewer limitations,” Graham said.
Earlier this year, Anadarko sold
155,000 acres net in the western Eagle Ford to a partnership of Sanchez
Energy Corp. and private equity firm
Blackstone Energy Partners LP for $2.3
billion (OGJ Online, Jan. 13, 2017).
The moves are part of Anadarko’s
effort to refocus its portfolio on the
Delaware basin, DJ basin, and deepwater Gulf of Mexico. In its first-quarter earnings report, Al Walker,
Anadarko chairman, president, and
chief executive officer, said the firm
has “largely completed” its divestiture
program, ending the quarter with
nearly $6 billion of cash on hand.
costs rising up to 30% in certain basins,
“Today’s improving supply-de-
mand balance in the oil field services
and drilling sector has reduced much
of the E&P sector’s bargaining pow-
er onshore, though offshore oil field
services and drilling demand will re-
main weak. E&P companies can seek
further cost reductions through sup-
ply-chain management, restricting
drilling to prolific acreage, and indus-
However, overall debt in the E&P
sector will remain high in 2017-18
despite stronger cash flow and liquid-
ity amid EBITDA growth, asset sales
and equity issuances, Moody’s said.
Companies increased debt balances
in 2010-14, when they significantly
outspent cash flow and grew produc-
tion while oil and natural gas prices
remained high, funding deficits with
debt. E&P debt-related credit metrics
continue to improve as EBITDA in-
creases, but remain well below their
Mergers and acquisitions will be
robust over the next 12-18 months as
oil and natural gas prices hold relatively steady and financing again becomes available for deals, Moody’s
said. An active M&A market bodes
well for the E&P sector, with asset
sales improving liquidity or reducing
debt for capital-intensive companies
with high leverage, while giving others opportunities to buy high-quality
assets at relatively low prices.
WildHorse to buy
Eagle Ford acreage
for $625 million
WildHorse Resource Development
Corp. (WRD), Houston, has agreed to
acquire 111,000 net acres and associated production from Anadarko Petro-
Both poles of UK
politics swing to
the left on energy
by Bob Tippee, Editor
Has shock over Brexit made British politicians, as they say, daft?
With a snap election scheduled June 8,
parties on both ends of the political spectrum are discussing energy-price controls.
Labor Party Leader Jeremy Corbyn’s
plan to cap average household fuel bills
might not be the worst idea in a party
“manifesto” leaked to British newspapers
on May 11.
The document also calls for nationalization of various industries, governmental
control of the electric grid, and creation
of a state-owned energy company in every
region of the UK.
It also includes a ban on hydraulic
These and other proposals suggest
Labor believes too much time has passed
since the UK last let socialist mistakes
ruin its economy.
The party’s leftward departure from
sensibility should improve prospects for
Conservative Prime Minister Theresa May.
She called the election in a surprise
effort to secure her political position in
advance of negotiations over Britain’s exit
from the European Union, having replaced
David Cameron as prime minister without
an election last year (OGJ, May 15, 2017,
Contrasted with Corbyn’s statist
revanche, conservative resolve would be
May, however, wants to squander the
opportunity with an energy-price cap of
Even worse than the idea is the prime
minister’s squishy rationale.
Professing to believe in market freedom,
she contradicted herself by saying, “If we
see that a market that is supposed to be
competitive is not truly competitive, then
I think it’s right that we support working
families by doing something about that.”
The problem of British energy markets
in fact results from manipulations favoring
renewable energy. When the inevitable
costs slammed consumers, the govern-
ment quit adding subsidies.
But distortion remains. That’s the problem May should address.
Price caps are just a different type of
May at least acknowledged her departure from conservative principles.
“What matters is not an ideology,” she
explained. “What matters is doing what
you believe to be right.”
Corbyn could not have said it better.
(From the subscription area of www.ogj.
com, posted May 12, 2017; author’s e-mail: