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Ohio Utica Shale

EV Energy Partners buys Barnett shale share from Carrizo Oil

By Bob Downing Published: September 7, 2013

From Texas-based EV Energy Partners and affiliates on Friday:

 HOUSTON, Sept. 6, 2013 /PRNewswire/ -- EV Energy Partners, L.P. (NASDAQ: EVEP) announced that it, along with certain institutional partnerships managed by EnerVest, Ltd., has signed an agreement to acquire natural gas properties in the Barnett Shale from Carrizo Oil and Gas, Inc. EVEP has agreed to acquire a 31 percent interest in these assets for $67.6 million ($218 million for all EnerVest-affiliated entities combined).

The acquisition, which has been approved by the Board of Directors, is expected to close by October 31, 2013, and is subject to customary closing conditions and purchase price adjustments. EVEP plans to finance the acquisition with proceeds from its previously-announced Utica Shale acreage sale and borrowings under its existing credit facility.

The acquisition is comprised of 82 wells producing primarily from the Barnett Shale formation in Tarrant County, Texas. The assets include over 17,000 gross acres (9,500 net acres) which are 100 percent held by production.

The properties, and EVEP's share of reserves and production, include:

-- Estimated proved reserves as of July 1, 2013, of approximately 62.3 BCF and estimated probable reserves of 30.7 BCF, net to EVEP (based on recent strip prices)

-- 100 percent natural gas and 58.4 percent proved developed

-- 71 identified low-risk proved and probable drilling locations with an estimated average drilling and completion cost of $0.85 to $0.90 per MCF

-- Net daily production to EVEP's interest of approximately 13.1 MMCF/D

-- Natural gas pricing of NYMEX less $0.90 to $1.00 per MCF

-- Current lease operating costs, including ad valorem taxes, of $0.65 to $0.75 per MCF of production

-- Production taxes of 1.7% to 2.1% of revenue

-- Incremental annual general and administrative expense of approximately $125,000

Mark Houser, President and CEO, said, "These 'bolt-on' assets are very complementary to our strong operating position within the Barnett Shale. Our team has a demonstrated exploitation track record in the Barnett and will leverage their expertise in these new high-quality gas properties. The Barnett reservoir within these new leases has estimated gas in place of 150-200 BCF per 640 acre section and the existing wells drilled have estimated ultimate recoveries averaging over 5 BCF per well. We believe these properties will provide very attractive future development opportunities, even at current gas prices."

In conjunction with the acquisition, and consistent with its strategy of hedging production of acquired assets, EVEP intends to enter into arrangements to hedge a portion of the acquired production volumes at or prior to closing.

EV Energy Partners, L.P., is a master limited partnership engaged in acquiring, producing and developing oil and gas properties. More information about EVEP is available on the internet at www.evenergypartners.com.

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