Synergy Resources Corp., Denver, has agreed to acquire 33,100 net acres in the Greeley Crescent area of Weld County, Colo., from Noble Energy Inc., Houston, for $505 million. The deal is effective Apr. 1 and expected to close as early as June.
Average production on the assets is 2,400 boe/d net to Noble, with two-thirds operated and one-third nonoperated. The acreage and production sold represent 8% and 2%, respectively, of Noble's totals in the DJ basin.
Synergy says the acreage is largely contiguous allowing for longer lateral lengths per well and efficient development of systems. More than 80% is held by production from vertical wells allowing for orderly horizontal development.
Several hundred vertical wells have been drilled on the assets by multiple operators. Noble has drilled 14 horizontal wells on the acreage over the past 4 years.
Synergy has identified more than 900 gross locations, of which more than 800 suitable for mid, long, and extended length laterals, using an initial assumption of horizontal development with 20-24 wells/drilling unit, creating multiyear drilling inventory.
Drilling locations will target the Niobrara A, Niobrara B, Niobrara C, and Codell zones, which all produce in the acquired acreage.
“This acquisition is transformational for Synergy and a significant step forward in the company’s evolution to become a leading operator in the Wattenberg field,” said Lynn Peterson, Synergy chairman and chief executive officer. “By consolidating our properties into a more focused footprint, we should be able to gain operating efficiencies.
“We do not expect to increase our operational activity in 2016,” he said. “However, we anticipate the development of the acquired properties to be a significant part of our expanded 2017 operation program, which is expected to incorporate up to 3 drilling rigs.”
Separately, Synergy has agreed with two private entities to divest 3,700 net undeveloped acres and 107 vertical wells primarily in Adams County, Colo., for $27 million in cash. The divested assets had associated production of 200 boe/d. The deal is expected to close in the second quarter.
After completion of its deal with Synergy, Noble’s DJ basin position will total 363,100 net acres, including 111,600 combined acres in Wells Ranch-East Pony and 31,800 acres remaining in the Greeley Crescent area.
David L. Stover, Noble Energy’s chairman, president, and chief executive officer, said, “Our DJ basin development activities are currently focused on Wells Ranch and East Pony, where we have a deep inventory of long lateral drilling opportunities in an oily part of the basin. In addition, our existing infrastructure in these areas provides a competitive advantage.”
Noble has now announced deals totaling more than $775 million in proceeds this year. The acreage included in the transaction remains dedicated to the company’s midstream business for oil and water gathering, as well as freshwater services.