ARP acquires gas assets
PHILADELPHIA – Atlas Resource Partners L.P. said Monday it has entered into a definitive agreement to acquire 466 billion cubic feet of natural gas proved reserves in the Raton, N.M., and Black Warrior, Ala., basins from EP Energy E&P Co. L.P., a subsidiary of EP Energy LLC, for $733 million.
The transaction, which is expected to close in the third quarter and is subject to purchase price adjustments, will have an effective date of May 1, 2013.
Edward E. Cohen, chief executive officer of ARP, said in a statement that the acquisition is expected to be “directly and positively transformative to ARP and its existing operations.”
Upon closing, the new EP Energy assets are expected to immediately provide ARP with accretive cash flow from a substantial amount of mature, low-declining natural gas production in various regions, primarily in various producing areas including the Raton Basin and the Black Warrior Basin.
The acquired properties represent approximately 466 Bcf of natural gas proved reserves, of which 93 percent are proved developed. The assets currently produce 119 MMcfd of natural gas, which nearly doubles ARP’s existing net production for May 2013. In addition, by agreement with ARP, ARP’s parent, Atlas Energy, L.P., will acquire as part of the same transaction approximately 45 Bcf of natural gas proved reserves in the Arkoma Basin in southeastern Oklahoma from EP Energy for $67 million.