Petro River Oil Corp. has entered into a purchase agreement to acquire Horizon I Investments LLC in an all-stock deal. The acquisition will provide Petro River with approximately $5 million in cash plus a 20% membership interest in Horizon Energy Partners LLC.
Horizon Energy Partners is an oil and gas exploration and development company with a portfolio of domestic and international assets. The majority of the funding for Horizon Energy Partners has come from oil and gas industry professionals, including several former senior oil industry executives.
Horizon Energy Partners is managed by Jonathan Rudney, who has over 30 years of senior executive experience in the upstream oil and gas industry. Horizon Energy Partners was formed to take advantage of the current depressed oil market by identifying and acquiring a portfolio of several oil and gas assets.
Horizon Energy Partner’s key projects include two assets located in the UK, adjacent to the giant Wytch Farm oil field. The Wytch Farm oil field is the largest onshore oil field in Western Europe having produced approximately 500 million barrels of oil and 175 billion cubic feet of natural gas since first production in 1979.
Other projects include the redevelopment of a large oil field in Kern County, California, and the development of a recent discovery in Kern County (together, the California Projects). The field to be redeveloped was discovered in 1933 and has produced over 90 million barrels of oil to date and 90 billion cubic feet of gas from approximately 600 wells and 12 discrete pools. The California Projects are located adjacent to or within one of the richest oil source “kitchens” in the world. Within a 20-mile radius, over 10 billion barrels of oil have been produced and the area is home to four of the 10 largest onshore oil fields in the US.
Rudney commented, “Although the projects in our pipeline are characterized by varying risk profiles and development timelines, they all have material upside. Some very interesting opportunities have surfaced in the current low commodity price environment. The portfolio consists solely of conventional opportunities, with finding and development costs of less than $10 per barrel. On a risked basis, Horizon Energy Partners has an opportunity to find tens of millions of barrels of oil.”
Stephen Brunner has been named Petro River president. He will also serve on the board of managers of Horizon Energy Partners. Brunner has over 30 years of domestic and international operations in the exploration and production industry. He most recently served as president and CEO of Constellation Energy Partners, a position he has held since 2008.
This transaction is the second transaction within a month that Petro River has closed. The first transaction was a joint venture that closed on Oct. 30 with Fortis Property Group, Petro River, and Megawest Energy Kansas Corp., a wholly owned subsidiary of Petro River, to make various equity and debt investments in oil and gas related projects. Under the terms of the joint venture, Fortis contributed assets valued at an estimated $28.3 million for a 41.5% equity interest in Megawest Kansas and Petro River contributed its 50% interest in the Pearsonia West Concession for a 58.5% equity interest in Megawest Kansas.
One of the objectives of the joint venture is to develop the vertical drilling program for Petro River’s Pearsonia West Concession, consisting of 106,500 contiguous acres in Osage County, Oklahoma.