Houston’s Encino Acquisition Partners, the company that just made a $2 billion purchase of Utica Shale holdings from Oklahoma City’s Chesapeake Energy indicated the deal means more than 900,000 net acres of leasehold.
In its announcement, Encino said the nearly 900 wells involved in the deal in Ohio produce more than 600 million cubic feet of gas equivalent a day. EAP plans to operate multiple drilling rigs on the properties to increase production and cash flow.
Who is Encino? The company was formed just last year by the Canada Pension Plan Investment Board and Encino Energy. Their purpose was to acquire large, high-margin oil and gas production and development assets in the lower 48 states in the U.S.
The Canada Pension Plan Investment Board plans to invest $1 billion in Encino Energy and own nearly 98% of the partnership.
“At EAP, Encino and CPPIB are building a company focused on shareholder returns with top-notch people, carefully managed risk and sustainable, safe operations,” commented Hardy Murchison, Encino’s Chief Executive Officer. “With a multi-decade inventory of development projects held by 920 producing wells, the Utica acquisition provides an excellent start for EAP. We are excited to work with Chesapeake’s employees in the Utica and all other stakeholders in the state of Ohio. With a strong balance sheet and a partner of CPPIB’s stature, EAP is well positioned for continued growth through drilling and acquisitions.”
“We are pleased to support EAP’s acquisition of these highly attractive Utica Shale assets, which provides CPPIB with meaningful exposure to a leading North American natural gas play and aligns with the growing focus on energy transition. This transaction represents a unique opportunity to acquire a foundational asset that has a large inventory of wells with a well-established production history, and will be managed by Encino, whose management has deep operational and development expertise in the Appalachian region,” said Avik Dey, Managing Director, Head of Energy & Resources, CPPIB. “Through EAP, we are continuing to efficiently expand our energy and resources portfolio in key U.S. energy markets as we seek to further diversify the CPP Fund. We look forward to building on our ongoing partnership with Encino to pursue high-quality energy assets in the lower 48 states.”
It was the second major deal announced in recent days by the Canada Pension Plan Investment Board. The CPPIB announced earlier a nearly $628 million joint venture with Boston Properties Inc;. to acquire the Santa Monica Business Park in the Ocean Park neighborhood of Santa Monica, California.