Panhandle Oil and Gas expands its holdings with the acquisition of nearly 800 acres in the SCOOP and Haynesville plays. In a $6.9 million deal, Panhandle acquired the assets from Red Stone Resources, LLC.
The deal involved $6.4 million in cash and $500,000 in Panhandle common stock. Panhandle planned to raise the cash through an underwritten public offering of common stock of 5,000,000 shares at a price to the public of $1.63 per share. The company also granted the underwriters a 30-day option to purchase up to 750,000 more shares at the same price. The offering was to close Sept. 1.
“This is an outstanding acquisition for Panhandle that fits very well with our stated strategy to grow the company on an accretive basis,” said Chad Stephens, President and CEO.
The purchase also marks Panhandle’s entry into the Haynesville play of East Texas and Louisiana. Stephens said the company believes the Haynesville has significant potential and good development visibility.
The acquisition involves 28 sections in the Springboard area of Grady County in Oklahoma. Panhandle said the sections in the purchase have producing wells and leases held by production. Key operators in the play are Continental Resources and Marathon Oil.
The site has 78 gross wells, 21 in progress and an estimated 97 undrilled locations.
The current net production is 1.1 Mmcfe/d and 93% is natural gas. The estimated next 12 months of cash flow is $1.1 million.
In the Haynesville, the acquisition involves 509 net acres in Harrison, Panola and Nacogdoches counties of eastern Texas and current net production of which is 100% natural gas is 1,032 mcf a day. It involves 23 wells, another 23 in progdress and 26 more undrilled locations. Four rigs are running on the acreage and the operators are Aethon, Comstock and Rockcliff.
Source: Panhandle Oil and Gas
