A deal by a Texas-based energy company to sell nearly 104,000 acres in Ohio’s Utica shale is foundering.
EV Energy Partners Executive Chairman John B. Walker, in a Tuesday teleconference from New York, said efforts to put together a Utica sale with an unnamed buyer have failed.
That company made an acceptable cash offer for most of EV Energy Partners’ acreage, but the terms of the agreement sought by the unnamed firm were unacceptable, he said.
Negotiations with that company stretched over several months and are continuing, he said.
But his company is reopening talks with other parties on smaller packages in eastern Ohio and surrounding areas, Walker said.
The price and the terms of the sale must be satisfactory, he said.
EV Energy Partners, based in Houston, has said it decided to sell off the leased land rather than invest the money to drill natural gas-oil wells itself. Each well can cost $6 million.
The available land includes 40,300 acres in Stark County; 21,800 acres in Tuscarawas County; 12,300 acres in Trumbull County; and 10,900 acres in Carroll County. That also includes Guernsey County, 4,600 acres; Harrison County, 1,700 acres; Mahoning County, 4,400 acres; Muskingum County, 6,200 acres; Noble County, 1,000 acres, and other unidentified counties, 500 acres.
Walker said his firm, the publicly traded arm of privately held EnerVest Ltd., had initially planned to complete the sale by Jan. 1.
Some had estimated that the sale could generate as much as $6 billion.
Walker’s company holds some of the most attractive Utica lands that are already producing natural gas, oil and natural gas liquids: ethane, butane and propane.
EnerVest is a partner with Chesapeake Energy Corp. and French energy company Total SA in drilling on 619,000 acres in 10 counties in eastern Ohio.
EV Energy Partners also intends to keep an additional 73,500 acres in eastern Ohio and western Pennsylvania, at least for now. That includes acreage in Summit, Portage and Wayne counties. The acreage being retained totals 56,600 acres in Ohio and 16,900 acres in Pennsylavnia.
The company could opt in the future to drill on the 73,500 acres or it could decide to sell off or swap that land, company officials said.
The company said it intends to keep its shallow vertical-only wells in Ohio’s Clinton sandstone and the deeper Knox wells.
It is a key player in investing in pipelines and gas-processing facilities in eastern Ohio.
Bob Downing can be reached at 330-996-3745 or email@example.com.