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EV Energy Partners Acquires $59 Million Eagle Ford

Source: www.gulfoilandgas.com 2/1/2017, Location: North America

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EV Energy Partners, L.P. announced that on January 31, 2017, it closed on an acquisition of Eagle Ford oil and natural gas properties in Karnes County, TX for $58.7 million (before post-closing purchase price adjustments). Additionally, the Partnership announced the divestiture of a portion of its Barnett Shale natural gas properties for $52.1 million (before post-closing purchase price adjustments). Proceeds from the Barnett Shale divestiture, which closed on December 1, 2016, were deposited into a 1031 ‘like-kind' exchange account. The acquisition was funded with $52.1 million of proceeds from the 1031 ‘like-kind' exchange account and $6.6 million of borrowings under the Partnership's revolving credit facility.

As part of the Eagle Ford acquisition, EVEP acquired a 5.8 percent working interest in 9,151 gross acres (529 net acres) in Karnes County, TX from a third party. Certain EnerVest Institutional Partnerships (EnerVest) own an 87 percent working interest in and EnerVest acts as operator of the properties.

Acquisition Highlights:

- Includes Eagle Ford and Austin Chalk reserves and drilling opportunities
- Estimated proved reserves of approximately 6.4 Mmboe and probable reserves of 1.3 Mmboe, net to EVEP (based on recent strip prices)
- 22 percent proved developed and 61 percent crude
- Current net daily production of approximately 1.0 Mboepd (73 percent crude)
- Over 200 economic, scalable and repeatable proved and probable horizontal drilling opportunities
- Additional possible drilling locations
- Attractive drilling economics at current strip prices
- Significantly higher margins and higher cash flow from acquired Eagle Ford Shale properties as compared to the divested Barnett Shale properties (based on recent strip prices)

The Partnership's Barnett Shale divesture represented estimated proved reserves of 94.6 Bcf of dry gas (based on recent strip prices) and approximately 13.0 Mmcfpd of natural gas production. Based on year end 2015 SEC proved reserves, the divested properties represented 16 percent of EVEP's existing Barnett position.

"We are pleased to complete this tax efficient sale and subsequent acquisition of properties. We believe that this position in the Eagle Ford Shale affords many attractive, self-funding, near term drilling opportunities and will increase our crude production by approximately 25 percent in 2017," stated Michael Mercer, President and Chief Executive Officer.

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