GE Energy Financial Services, a unit of GE (GE), has formed its third partnership with a Vess Oil Corp. affiliate to purchase oil reserves in East Texas for $108 million. The partnership is acquiring approximately 13,000 net acres and associated Woodbine production from an affiliate of EnerVest, Ltd. The assets are located approximately 20 miles northeast of College Station in Brazos, Madison and Grimes counties, and the target zones are the existing Woodbine and prospective Eagle Ford formations.
GE Energy Financial Services invested $77 million for a majority stake and limited partner role, with a Vess Oil affiliate acquiring the remaining interest and serving as general partner and operator. Additional financial details were not disclosed.
The companies partnered previously to acquire reserves in Brazos County as well as in Kansas. A separate Vess Oil affiliate is developing Woodbine reserves in the Kurten Field, adjacent to the newly acquired assets. The new partnership is conducting drilling and completion operations on its first and second Woodbine wells as part of a multi-year continuous drilling program.
“Our partnership with GE accomplishes our strategic objective of expanding our operations in Brazos County and provides a platform for growth through bolt-on acquisitions in this area,” said Barry Hill, CEO of Vess Oil Corp.
Commenting on the development plan, Ronnie Nutt, chief operator officer of Vess Oil, stated, “I am eager to launch our program and look forward to expansion opportunities predicated on demonstrable results.”
Ray Edgar, a managing director and leader of the Oil and Gas team at GE Energy Financial Services, added, “We are excited to be partnering again with the Vess team. This transaction contributes to the growth not only of Vess but also the seller, EnerVest, both of which have played a significant role in our success over the past two decades.”
Since 1991, GE Energy Financial Services’ Oil and Gas team has provided more than $4 billion in partnership equity for its independent private and public oil and gas partners-operators in the United States. Based in Stamford, Connecticut – with an office in Houston – the Oil and Gas team is active in all major onshore basins and in shallow water Gulf of Mexico. Its 25 partnership investments own interests in more than 3,000 wells that produce an estimated 26,000 barrels of oil equivalent daily.