Resolute Energy to sell Powder River Basin assets

Denver, Colorado-based Resolute Energy Corp. (NYSE: REN) has entered into a definitive agreement to sell its Hilight Field assets in Wyoming’s Powder River Basin to an undisclosed private party for $55 million.

As part of a plan announced in June to reduce debt and improve liquidity, the company is marketing assets. Upon closing of the transaction, expected on or about Oct. 6, the company will have completed close to $100 million in asset sales this year, said Resolute Chairman and CEO Nicholas J. Sutton in a company statement.

Global Hunter Securities analysts, in a note to investors Thursday, said, “The assets include Q2:15 production of 9.9 MMcfe/d (~70% gas), largely from legacy conventional operations, and 47.8K net acres prospective for horizontal drilling in the oily Turner and Parkman formations. Based on production multiples of $2K/MMcfe/d–$4K/MMcfe/d, we estimate PDP value of $20MM-$40MM, resulting in an undeveloped acreage multiple range of $315/acre-$730/acre.

“We believe that REN prefers to use the proceeds from the sale to repay borrowings under its revolving credit facility ($160MM outstanding at 6/30/15 under $260MM borrowing base) but must request the ability to do so from the holder of its 2nd lien term loan,” the analysts continued.

Petrie Partners LLC acted as financial advisor to Resolute on the transaction.


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