United Energy announced it is moving ahead with plans to acquire the remaining 51% of some 200,000 acres and 2,200 wells in the Cherokee Basin of Northeast Oklahoma and Southeast Kansas.
Nearly 3-weeks after the Plano, Texas-based company announced it had acquired 49% of the Cherokee Basin, it followed up Wednesday with another announcement that it was acquiring the rest of the property in Nowata, Washington, Rogers and Tulsa Counties in Oklahoma and Montgomery County in Kansas. But it did not disclose the cost of the acquisition.
“This acquisition gives United Energy 100% control of its operations and was a key essential step in our developmental plans and growth in shareholder value,” said Brian Guinn, UE CEO.
On October 4th United Energy announced it had acquired 49% non-operated ownership in 200,000 acres of oil and natural gas leasehold in Northeastern Oklahoma and Southeastern Kansas including approximately 2,200 wells and 1,000 miles of natural gas pipelines and gathering systems.
The majority of these assets were purchased by Constellation Energy Partners from Newfield Exploration Company for $128 million in 2007. The newly acquired assets once reached peaked production of 20,000 MCFD in 2005 and peak oil production of 325 BOPD in 2014.
Company leaders say the dynamic of rising natural gas demand and historic low inventories makes United Energy’s entry into this region a significant strategic decision. Natural gas prices have doubled in recent months which continue to prove the company’s value proposition.
As a result of the acquisition, United Energy adds immediate production of approximately 1,000 MCFD and approximately 30 BOD. This asset base includes hundreds of opportunities to restore production through re-work of existing wellbores, recompletions of behind pipe formations, water-floods of existing oil fields, and new drilling opportunities of Proven Undeveloped locations to offset existing production.
Combined with its reactivation of several compressor sites and leases from its existing assets, United Energy is confident the company will reach its production target of 2,500 MCFD by Q4.
The upward pressure on natural gas prices is global. In Europe, natural gas is $22/MMBtu and in Asia, over $30/MMBtu.
Source: Business Wire
