FourPoint Energy, LLC announced the signing of definitive agreements to acquire oil and gas assets from Chesapeake Exploration L.L.C. ("CEX") and CHK Cleveland Tonkawa L.L.C., whose preferred interest owners are funds managed by GSO Capital Partners LP, as well as other third party investors (collectively the "Preferred Holders"), and common interest owner CEX in three related transactions for a combined purchase price of $840 million, with incremental and contingent payments payable to the Preferred Holders upon certain commodity price and performance conditions. In addition, the Preferred Holders will receive a distribution of cash on hand and working capital of CHK Cleveland Tonkawa L.L.C.
The assets to be acquired include an interest in approximately 1,500 producing wells primarily in the Cleveland, Tonkawa and Marmaton formations with average daily net production of approximately 21,500 Boed over the twelve months ended April 2015. The production mix is 7,000 Bbld of oil, 5,000 Bbld of natural gas liquids and 57 Mmcfd of natural gas. The assets cover nearly 250,000 net acres centered in Roger Mills and Ellis counties, Oklahoma. Approximately 95 percent of the leasehold is held by production. FourPoint will assume full operations of the assets at closing which is anticipated to be August 31, 2015.
George Solich, President and CEO of FourPoint said, "The acquisition complements FourPoint's current acreage footprint and boosts our inventory by adding a significant amount of operated, oily locations in formations largely unrepresented in our current portfolio. Additionally, the assets to be acquired include a large base of production which strengthens our cash flow profile in this uncertain commodity price environment. The acquired assets will be instrumental in our ongoing efforts to build a world class portfolio of oil and gas assets in the Western Anadarko Basin."
Pro forma for the acquisition and prior to customary post-closing adjustments, FourPoint's Western Anadarko footprint will exceed 400,000 net acres with net production estimated at 260 Mmcfed from approximately 4,600 gross wells, with half of the production coming from oil and natural gas liquids.
FourPoint Energy is a privately held acquisition, exploration and production company headquartered in Denver, Colorado.