Eagle River Energy Advisors, LLC’s Post

LM Loses a Touchdown but Scores a Win Midstream consolidation in the Permian this quarter continues to light up headlines as big names build up bigger portfolios to handle record production volumes. The largest of these, of course, is the merger of Tulsa-based ONEOK and Magellan Midstream Partners—and a strategy that brings natural gas, NGL, crude oil, and refined products infrastructure under a single roof. But for smaller Permian midstreamers operating both oil and gas gathering systems, when does a single focus make for a better strategy? Reese Energy Consulting today is following the latest from Dallas-based LM Energy Holdings, which will wave goodbye to its Touchdown Crude Oil Gathering System in the Delaware’s Lea and Eddy counties, N.M. The price and buyer weren’t disclosed. The deal includes 130 miles of crude pipe flowing 75 MBPD and two terminals with 136 MBbls. of storage capacity. LM put shovel to dirt on Touchdown in 2019, becoming its first project before officially launching the company later that year. Next on the to-do list was building natural gas gathering bones also in the Delaware, where LM operates 70 miles of pipe. The company will flip the switch on a sixth compressor for that system before the end of the year. Amid record gas volumes and a death-stare on producer flaring, LM believes going all in on natural gas is a pivot that checks every box for long-term growth. With an infusion of capital from the sale of Touchdown, the company plans to build more gathering and, maybe, processing infrastructure going forward in a play hollering for both. What do you think? Learn more about REC and our natural gas services and expertise at https://lnkd.in/ebXT2mS. #energy #midstream #permianbasin #naturalgas #reeseenergyconsulting

𝗘𝗤𝗧 𝗖𝗼𝗿𝗽 𝗘𝘅𝗽𝗹𝗼𝗿𝗲𝘀 𝗦𝗮𝗹𝗲 𝗼𝗳 $𝟯 𝗕𝗶𝗹𝗹𝗶𝗼𝗻 𝗡𝗮𝘁𝘂𝗿𝗮𝗹 𝗚𝗮𝘀 𝗣𝗼𝗿𝘁𝗳𝗼𝗹𝗶𝗼 🔍 𝗘𝗤𝗧 𝗖𝗼𝗿𝗽, a leading U.S. natural gas producer, is reportedly seeking to sell minority stakes in wells located in Pennsylvania's Marcellus shale formation. This portfolio, potentially worth over $𝟯 𝗯𝗶𝗹𝗹𝗶𝗼𝗻, represents a significant move in the energy sector. Key Details: - 𝗔𝘀𝘀𝗲𝘁 𝗗𝗲𝘀𝗰𝗿𝗶𝗽𝘁𝗶𝗼𝗻: The stakes, known as "non-operating" interests, offer revenue from hydrocarbon sales without the responsibility of drilling or operations. - 𝗣𝗿𝗼𝗱𝘂𝗰𝘁𝗶𝗼𝗻 𝗖𝗮𝗽𝗮𝗰𝗶𝘁𝘆: The assets in question currently produce around 𝟳𝟬𝟬 𝗺𝗶𝗹𝗹𝗶𝗼𝗻 cubic feet per day. - 𝗢𝗽𝗲𝗿𝗮𝘁𝗶𝗼𝗻𝗮𝗹 𝗖𝗼𝗻𝘁𝗿𝗼𝗹: Chesapeake Energy operates these assets, with 𝗘𝗤𝗧 holding a 𝟮𝟱% non-operating interest. Strategic Intent: - 𝗗𝗲𝗯𝘁 𝗥𝗲𝗱𝘂𝗰𝘁𝗶𝗼𝗻 𝗮𝗻𝗱 𝗦𝗵𝗮𝗿𝗲𝗵𝗼𝗹𝗱𝗲𝗿 𝗩𝗮𝗹𝘂𝗲: 𝗘𝗤𝗧's decision to sell these assets is part of its strategy to reduce its $𝟱.𝟵 𝗯𝗶𝗹𝗹𝗶𝗼𝗻 debt and enhance shareholder returns. - 𝗕𝗮𝗰𝗸𝗴𝗿𝗼𝘂𝗻𝗱: These assets were primarily acquired during 𝗘𝗤𝗧's $𝟯 𝗯𝗶𝗹𝗹𝗶𝗼𝗻 takeover of Alta Resources in 𝟮𝟬𝟮𝟭. Market Context: - 𝗘𝗻𝗲𝗿𝗴𝘆 𝗦𝗲𝗰𝘁𝗼𝗿 𝗖𝗼𝗻𝘀𝗼𝗹𝗶𝗱𝗮𝘁𝗶𝗼𝗻: There's been a surge in consolidation, with major deals by Exxon Mobil and Chevron totaling over $𝟭𝟬𝟬 𝗯𝗶𝗹𝗹𝗶𝗼𝗻 in recent months. - 𝗡𝗮𝘁𝘂𝗿𝗮𝗹 𝗚𝗮𝘀 𝗦𝗲𝗰𝘁𝗼𝗿 𝗗𝘆𝗻𝗮𝗺𝗶𝗰𝘀: Although deal activity has been subdued in natural gas due to lower U.S. demand, rising export demand may boost valuations and deal flow next year. Potential Industry Shift: - If Chesapeake Energy's acquisition of Southwestern Energy goes through,  it could surpass 𝗘𝗤𝗧 as the top U.S. natural gas producer. Disclaimer: - The sale is not guaranteed, and 𝗘𝗤𝗧 has declined to comment on these discussions. 📈 This potential portfolio sale signifies a notable shift in strategies for major players in the natural gas sector, reflecting broader trends in energy market consolidation and valuation dynamics. #NaturalGas #EnergySector #MarketConsolidation #EQT #InvestmentOpportunities https://lnkd.in/daP7qAeS

Natural Gas Conundrums Play Heavy on 1Q Earnings Reports Is that confetti raining from the sky? No, that would be a blizzard of 1Q earnings reports from our oil and gas producer friends commiserating sub-zero natural gas prices, and our midstream friends largely making hay. Associated gas in the Permian has become a huge pain in the arse for producers that’s not only costing them for takeaway, but the pipeline capacity to get that flow out of the basin is growing tighter than an Arkansas tick after a blood supper. For most midstreamers, it’s a whole other ballgame. Reese Energy Consulting today has selected two reports for cussin’ and discussin’ because we’re too darn busy with audits to sift through them all. On the producer side, we send a whoop and holler to Minn-based NOG, the nation’s largest non-operated E&P that continues to work magic in the Permian, Williston, and Marcellus. After two acquisitions last year, the company expanded its Delaware position to 40,000 acres—crowning it the largest asset—and bringing cupcakes to its entry in the Ohio Utica. NOG posted 1Q record production of 120 MBOED with oil and gas sales of $532 million. On the midstream side, we send a shoutout to Tulsa-based ONEOK, which last year combined its expansive natural gas bones with downtown neighbor Magellan Midstream Partners and its massive crude oil and refined products pipeline network. Magellan owns the nation’s largest refined products pipeline extending 9,800 miles from the Texas Gulf across 15 states. Now a year into the acquisition, ONEOK continues to integrate its $18.8 billion baby while reporting 1Q adjusted EBITDA of $1.44 billion and a $70 million increase to its 2024 net income guidance to a range of $2.73 billion to $3.03 billion. This, largely due to increased volumes of natural gas and NGLs. What do you think? Learn more about REC and our producer and midstream consulting services at https://lnkd.in/ebXT2mS. #energy #midstream #naturalgas #mergersandacquisitions #reeseenergyconsulting

There’s been a frenetic scramble among oil and gas producers lately to acquire top-tier acreage and production assets they think they will need to survive and thrive. Some of that is still being done through smaller deals, but the expansion mode of choice for most has been big-time M&A. In today’s blog, we discuss Devon Energy’s recently announced $5 billion acquisition of Grayson Mill Energy, yet another private-equity-backed E&P cashing in on the smart moves it had been making. https://lnkd.in/gDCHpYjG

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Congrats to the NOG - Northern Oil & Gas, Inc. (NYSE: NOG) team on their latest splash in the NonOp space! SM Energy Company with NOG as its non-op partner, recently announced that they are purchasing the Uinta Basin assets of XCL Resources (an EnCap PortCo) for a combined unadjusted purchase price of $2.55 billion in cash. NOG will be acquiring an undivided 20% stake in the XCL Assets for $510.0 million in cash. The current production is >10,500 Boed (2-stream, excluding NGLs, >85% oil) across ~9,300 net acres, located primarily in Duchesne and Uintah Counties, Utah. The next 12 months unhedged cash flow from operations, post-closing (assuming 10/1/24 start date) is expected to be >$170 million, based on recent strip prices, representing a transaction multiple of <3.0x.

NEW LISTING: Eagle River Energy Advisors, LLC has been exclusively retained by SOGC, Inc. (formerly Sinclair Oil & Gas Company) to divest certain operated working interest and assets in the Arkoma Basin. The assets provide the opportunity to acquire a gas-weighted production stream of 515 Mcfe/d. Additionally, this package has stable with a shallow forecast decline of ~7% and a NTM Cash Flow of $173,000. Lastly, 2,246 net acres of leasehold provides significant exposure to future development of the Woodford Shale. SOGC, Inc. (formerly Sinclair Oil & Gas Company) is a privately held, vertically integrated oil company involved in all aspects of the oil and gas industry, from exploration to marketing. Founded in 1916 by Harry F. Sinclair, Sinclair Oil & Gas Company is one of the oldest continuous brands in the oil business, with their dinosaur being one of the most recognized icons in the United States. Bids for the Acquisition Opportunities with SOGC, Inc. referenced in this press release are due August 21, 2024. Contact the Eagle River Energy Advisors, LLC team to learn more. #OilandGas #ArkomaBasin #Oklahoma

Diversified Energy’s Secret Sauce Looking to offload those lower-producing conventional gas wells? Say you’ve gotta whole gob of ‘em ready to put out to pasture? Diversified Energy Company has an app for that. Not of the software kind but the business model kind which, (forgive the shameless Beatles reference) takes a sad song and makes it better by acquiring and resuscitating mature wells that still hold another 40-50 years of life. That model—no drilling, no fracking—has led to DEC owning the nation’s largest number of gas wells. More than 70,000. More than ExxonMobil and Chevron. Reese Energy Consulting today is following the latest from Ala.-based Diversified, the largest conventional gas producer across Appalachia, which two years ago this month took its playbook into the Haynesville, Cotton Valley, Barnett, Anadarko, and Eagle Ford. Fertile terrain, where producers are also more fixed on their fracked wells. The shale revolution has given rise to all this lost love, of course. In fact, jumpstarted DEC back in 2001 as more E&Ps began to turn their nose up at traditional oil and gas wells to produce higher volumes. Helmed by founder and CEO Rusty Hutson, Diversified requires acquisitions to replenish inventory. It’s the essential ingredient of the company’s secret sauce to invest in low-risk, low-cost, long-life assets and squeeze every hydrocarbon molecule out of them. After conquering Appalachia and moving south, DEC has now found its latest prize again in East Texas, where it has executed a conditional purchase and sales agreement with Crescent Pass Energy for $106 million. The deal includes 170,000 acres, 827 wells, and 38 MMCFD with annual declines of 9%. Rock on, Rusty. What do you think? Learn more about REC and our natural gas marketing and midstream consulting services at https://lnkd.in/ewhkGFa. For more information about out online natural gas training courses, visit us at https://lnkd.in/ggd3UkJM.   

My post today for Steve Reese and Reese Energy Consulting. Fresh Powder Makes a Big Difference for Western Following Oxy's acquisition of Anadarko Petroleum Corporation, Western Midstream became a standalone business in 2019 with Oxy becoming its general partner. The parent-child relationship has proven fortuitous for both, particularly in their shared basins of the #Permian, #Delaware, #DJ, and the #PowderRiver where Oxy operates more than 300,000 net acres. Reese Energy Consulting today is following the latest news from The Woodlands, Texas-based Western Midstream, which operates 14,172 miles of pipeline to include 7 natural gas and 14 crude oil and NGLs pipelines, 23 gathering systems, and 71 processing and treating facilities in the Permian, DJ, South Texas, Utah, Pa., and Wyo. The company has now announced it will acquire Denver-based Meritage Midstream and its Powder River assets for $885 million. Highlights of the all-cash deal include 1,500 miles of gas gathering pipe, 380 MMCFD of processing capacity, and the 120-mile Thunder Creek NGL pipeline with a capacity of 38 MBPD. According to the Meritage website, the company also offers crude oil and condensate gathering, treating, blending, storage, and transportation but no word on whether these assets were part of the Western transaction. In any event, Western hails the PBR addition “transformative,” adding significant producer inventory, long-term contracts, and acreage dedications across 1.4 million acres, while increasing its total gas processing capacity to 440 MMCFD. What do you think? Learn more about REC and our natural gas, NGLs, crude oil, and midstream services at https://lnkd.in/eAebAz8.

Mach Natural Resources, a drilling oil and gas wells company, agreed to acquire Oklahoma oil and gas assets from EnCap Investments L.L.C, a provider of growth capital to independent energy companies, for $815m. Mach Natural Resources expects to add 1 rig on the newly acquired assets in addition to its current 2 rig development program while remaining under a 50% reinvestment rate, the company said. Paloma is currently running 1 rig in Grady County with 6 additional wells expected to be completed between the deal’s effective date of September 1 and the expected closing date of December 29, 2023. EnCap Investments (led by Marty Phillips) is advised by RBC Capital Markets and Vinson & Elkins. Mach (led by Tom L. Ward and Kevin R. White) is advised by Kirkland & Ellis and Latham & Watkins. Debt financing is provided by Chambers Energy Capital, EOC Partners, Farallon Capital Management, Macquarie Group and Mercuria Investments. #MergersAcquisitionsDivestitures #Investments #OilandGas