US-based Atlas Energy has said that its E&P subsidiary Atlas Resource Partners (ARP) has signed an acquisition agreement worth around $733m, with EP Energy E&P Company, a wholly-owned subsidiary of EP Energy.
As part of the deal, Atlas Energy will acquire about 466Bcf of natural gas proved reserves in the Raton basin in New Mexico and Black Warrior basin in Alabama.
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The assets are currently flowing about 119MMcfd of natural gas.
In addition, the company will acquire natural gas proved reserves in the Arkoma Basin from EP Energy for $67m.
The Arkoma assets includes 45Bcf of natural gas reserves, which are generating about 13 MMcf/d of net production from about 550 wells.
The transaction will allow Atlas to provide distribution guidance of $2.50 to $2.80 per unit for the year 2014, compared to the annualised distribution of $1.24 or $0.31 per unit paid for first quarter 2013.
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By GlobalDataAtlas Energy CEO, Edward E. Cohen, said the acquisition will allow the company to expand E&P operations of ARP, which will result in increased cash flow, as well as de-risking business.
"ATLS should likewise profit substantially from the multiple benefits of this transaction," Cohen added.
The transaction, which is subject to purchase price adjustments, is expected to be completed in the third quarter of 2013.
ARP has approximately 10,000 producing natural gas and oil wells in the Appalachia and the Barnett Shale in Texas, US.
Image: The assets in Raton and Black Warrior basins are currently flowing about 119 MMcfd of natural gas. Photo: Courtesy of Helen Wilkinson.
