Energy & Exploration acquires land, wells from Chesapeake

Posted Tuesday, Apr. 16, 2013  comments  Print Reprints

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Energy & Exploration Partners, a Fort Worth-based company, said Monday that it has acquired 57,275 net acres and 11 producing wells in East Texas from Chesapeake Energy.

The acreage is mostly in Madison and Grimes counties, which are between Huntsville and College Station.

The company plans "to commence a two-rig drilling program on the acreage acquired from Chesapeake," CEO Hunt Pettit said in a prepared statement.

Energy & Exploration Partners, which was launched in 2008, said it already had an additional 14,600 acres in the area, in which it holds a minority interest after selling stakes to other producers last year.

Terms of the deal were not released. But Energy & Exploration Partners previously disclosed its agreement to acquire the Chesapeake property for $127 million in a regulatory filing made in October.

But Brian Nelson, chief financial officer of Energy & Exploration, said those figures are outdated.

That October filing was made in connection with a planned initial public offering that was later withdrawn. He characterized the purchase as "a pretty good bite" and said it will be the focus of the young company's efforts going forward.

The acquired acreage includes the upper reaches of the Eagle Ford Shale, a booming oil field in South Texas.

The meeting of the Woodbine Sand, a formation that has long produced oil, and the Eagle Ford has led some to refer to the play as the Eaglebine. Other producers in the area include EOG Resources, Encana Corp and several smaller companies.

Nelson said the Chesapeake wells produce about 200 barrels of oil a day. He said Energy & Exploration expects to beginning drilling with its first rig within a few weeks and will add a second rig soon after.

He said wells in the field typically cost $8 million to $9 million. He declined to disclose a drilling budget.

Energy & Exploration Partners said it is backed by Apollo Investment Corp. and Highbridge Principal Strategies, which were issued notes in connection with the Chesapeake transaction.

Nelson said Energy & Exploration has acreage in West Texas' Permian Basin and in the Rocky Mountains, but "right now that's not our focus." The company's offices are at 100 Throckmorton St. in downtown Fort Worth.

Jim Fuquay, 817-390-7552

Twitter: @jimfuquay

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