Antero Resources Corporation announced that it has signed a definitive agreement with a third party to acquire approximately 55,000 net acres in the core of the Marcellus Shale for $450 million. Approximately 75% of the 55,000 net acres contains dry Utica rights. The acquisition includes undeveloped properties located primarily in Wetzel, Tyler and Doddridge Counties in West Virginia and approximately 14 MMcfe/d of net production. The transaction is expected to close in the third quarter of 2016, subject to customary closing conditions, with an effective date of January 1, 2016.
- Includes 33,000 net acres of core Marcellus leasehold in Wetzel County, WV, establishing a new platform for development and consolidation with stacked pay potential for the dry Utica
- Adds 12,000 infill net acres of core Marcellus leasehold in Tyler County, WV, where Antero already holds significant acreage
- Enhances dry gas optionality with 12,000 net acres of core Marcellus leasehold, adding or enhancing 225 core Marcellus dry gas locations
- Adds 4.1 Tcfe of unaudited Marcellus 3P reserves and 1.8 Tcf of dry Utica resource potential
- Substantially all of the 55,000 net acres will be dedicated to Antero Midstream for gas gathering, compression, processing, and water services
- In conjunction with the transaction, Antero is increasing its 2017 production growth target to a range of 20% to 25%
- All incremental production is expected to be sold at currently favorably priced markets through Antero's firm transportation portfolio
- An additional 13,000 net acres, including 1 Tcfe of unaudited Marcellus 3P reserves, 400 Bcf of dry Utica resource potential and 3 MMcfe/d of net production, are subject to the exercise by a third party working interest owner of its tag along option
Antero has agreed to acquire approximately 55,000 net acres of undeveloped Marcellus Shale leasehold, including deep rights on approximately 41,000 net acres highly prospective for the underlying dry Utica, and 14 MMcfe/d of net production for $450 million. Approximately 75% of the acquired acreage is located in Antero's Rich Gas, Highly-Rich Gas and Highly-Rich Gas/Condensate regimes, with the remaining 25% located in the Dry Gas regime. Antero estimates the undeveloped properties include 4.1 Tcfe of unaudited Marcellus 3P reserves and 1.8 Tcf of dry Utica resource potential. In total, the acquisition adds 625 identified 3P locations and enhances 435 existing 3P locations by incremental working interests and/or increased lateral length. The lateral length of the new or enhanced identified 3P locations averages 9,300 feet. Pro forma for the acquisition, Antero's Marcellus leasehold position includes over 480,000 net acres and 3P Reserves of 33.7 Tcfe.
Tag Along Option
A third party has a 30-day tag along option to sell the remaining 19% average working interest in the acquired properties to Antero, or an additional 13,000 net acres, under the same terms. The tag along acreage includes 1 Tcfe of unaudited Marcellus 3P reserves, 400 Bcf of dry Utica resource and 3 MMcfe/d of net production. If the tag along option is exercised by the third party, the adjusted acquisition price is estimated to be $560 million.