Exploration and production company Atlas Resource Partners (ARP) has signed an agreement to acquire proved natural gas reserves in West Virginia and Virginia from energy firm GeoMet and some of its subsidiaries for $107m.
The acquisition of about 70 billion cubic feet of natural gas reserves is expected to be immediately accretive to ARP’s distributable cash flow per unit.
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ARP chief executive officer Edward Cohen said that the transaction will add more low declining production to the company’s portfolio.
"These assets are situated in one of our core operating areas, the Appalachian Basin, where we currently manage substantial natural gas and oil production," Cohen added.
The acquired assets have current net production of around 22 million cubic feet a day (mmcf/d) from over 400 active wells and an existing expected decline rate of about 10-12%.
According to ARP, current production costs including lease operating costs are about $1.20 per million cubic feet(mcf), production and ad valorem taxes of around 10% and transportation and gathering costs of around $0.40/mcf.
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By GlobalDataARP owns an interest in over 13,000 producing natural gas and oil wells that are located primarily in Appalachia, the Barnett Shale in Texas, the Raton Basin in New Mexico and Black Warrior Basin in Alabama.
