Piceance Energy LLC, doing business as Laramie Energy Co. and financially backed by Par Pacific Holdings Inc., has agreed to acquire certain properties in the Piceance basin of Colorado for $157.5 million.
The assets comprise 89 MMcfed of existing production during November, 283 bcfe of proved developed producing reserves as of November, and more than 53,000 net operated acres and more than 18,000 net nonoperated acres.
Par Pacific says the assets’ estimated proved reserves total 541 bcfe; proved and probable reserves total 1.2 tcfe; and proved, probable, and possible reserves total 5 tcfe each as of November.
The acreage has 5,000 drilling locations, with more than 90% of operated acreage held by production. Pro forma for the deal, Laramie will have 140 MMcfed of production for the month of November.
The deal also includes 195 miles of gas gathering lines with 21,000 hp of owned compressors. A significant portion of the operations acquired is directly adjacent to existing Laramie operations with the potential for meaningful cost savings upon consolidation, Par Pacific notes.
The deal is expected to close on or before Mar. 1, 2016. As part of the financing, Houston-based Par Pacific's ownership interest in Laramie is expected to increase from 32.4% to 42.3% as a result of its $55 million common equity investment.
Piceance Energy in September entered into a joint venture with Wexpro Co., a subsidiary of Questar Corp., to develop gas in the basin (OGJ Online, Sept. 23, 2015).
The Piceance currently produces gas both from the Mesaverde tight gas sand formation, developed vertically; and from the Mancos shale formation, which is being developed both vertically and horizontally.