Entek Energy acquires additional Niobrara assets

Entek Energy Ltd. (ASX: ETE) has acquired all of the remaining jointly held Niobrara assets within Colorado and Wyoming from a former partner, covering the Niobrara oil resource play. The acquisition comprises approximately 13,500 net acres in the Focus Ranch Unit in addition to an approximately 42% net interest in the Slater Dome export pipeline. The total consideration paid by Entek for these assets is US$2 million, with no retained royalties or ongoing obligations on the former partner’s part in relation to the assets.

The acquisition has increased Entek’s interest in the Focus Ranch Unit to approximately 32,000 net acres across the total 36,000 gross acres under lease, with its interest in the Slater Dome pipeline having increased to approx. 98%. Both assets are operated by Entek.

Total lease and asset holdings of Entek’s Niobrara oil resource play project subsequent to the acquisition are shown in the table below.

 

Leases

Operator

Gross Acres under Lease

Net Acres to Entek

Battle Mountain AMI

East

~90,300

~15,300

Focus Ranch AMI

Entek

~36,000

~32,000

Other Non-AMI Leases

Entek

~4,700

~2,700

Total

 

~131,000

~50,000

"This is a common sense strategic acquisition which takes advantage of our former partner's focus on its other US assets and Entek's objective to actively move forward with the Focus Ranch Unit exploration program following the recent positive access related developments. The acquisition terms very much reflect the non-operated status of our former partner's interests in these assets and were able to be comfortably funded by Entek's existing cash reserves, with approximately US$11 million remaining after this purchase,” said Entek CEO Trent Spry in a statement.

“Importantly, the consolidation of these assets by way of this acquisition enables Entek to more easily progress and deal with new potential partners for the Focus Ranch Unit who we are looking to bring in to assist with the funding of an extensive exploration program across this significant and prospective Niobrara lease holding. It also delivers full control to Entek of the strategically important export pipeline traversing our Niobrara lease holdings and potentially facilitating future developments in the area,” he continued.

In a 2013 company presentation, the Focus Ranch area was noted by the company to be “a potential sweet spot of the Niobrara Oil Resource Play due to existence of igneous sills embedded within the Niobrara,” as the “sills provide potential for superior hydrocarbon storage, flow rates and recoverability.”

With a small Perth, Australia-based head office and a team based in Denver, CO, the company is US-focused with an acreage position in the Niobrara and non-operated production and royalty interests in the Gulf of Mexico.

 

 

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