NFR Energy LLC (NFR or the Company) announced the following:
NFR has closed two privately negotiated transactions to acquire producing and undeveloped oil and gas assets in the Anadarko Basin and the Eagle Ford Shale for an aggregate purchase price of approximately $736 million.
Pro forma for these transactions, NFR will have three established core operating areas with approximately 197,000 net acres in East Texas (Cotton Valley/Haynesville), 24,300 net acres in the Eagle Ford Shale and 64,000 net acres in the Anadarko Basin (Granite Wash and Cleveland). These positions are characterized by high return, high liquids content inventory. Combined pro forma production is approximately 27,200 Boe/d, (26% liquids).
First Reserve has consolidated its ownership of NFR through the purchase of its partner’s entire equity ownership position in NFR Holdings LLC, the parent company of NFR.
NFR has initiated the consolidation of the CUSIP numbers on the two separate offerings of the Company’s 2017 Senior Notes with the Company’s bond indenture Trustee.
The Company is in the process of changing its name to Sabine Oil & Gas LLC.
In separate transactions, the Company acquired all the assets of TLP Energy LLC and its subsidiaries, (the “Anadarko Basin Assets”), for $655 million and certain Eagle Ford Shale assets from two independent oil & gas companies for $81 million (the “Eagle Ford Shale Assets”), with both purchase prices adjusted for customary closing items. The Anadarko Basin Assets acquisition was effective October 1, 2012 and the Eagle Ford Shale Assets acquisition was effective September 1, 2012. Financing of the acquisitions was accomplished with additional equity from First Reserve and proceeds from a $500 million Senior Secured 2nd Lien Term Loan, underwritten by BofA Merrill Lynch, Citigroup Global Markets Inc. and Natixis.
The Anadarko Basin Assets are comprised of approximately 64,000 net acres (~95% operated) prospective for the Granite Wash and Cleveland Sand formations primarily located in Ochiltree, Lipscomb, Roberts and Hemphill Counties, Texas. Current net production from these assets is approximately 6,500 barrels of oil equivalent per day (Boe/d) and estimated total proved reserves, prepared by the Company, are over 40 MMboe, which are approximately 55% oil and natural gas liquids (“NGLs”).
The Anadarko Basin Assets have approximately 425 drilling locations and are anticipated to offer low-risk development opportunities and excellent project economics. The Eagle Ford Shale Assets consist of the Sugarkane acreage block, representing approximately 2,300 net acres in the “core of the core” of the Eagle Ford Shale. The acreage offers what the Company believes is low-risk, economically compelling development inventory that is expected to allow NFR to leverage its experience and success in the Haynesville Shale. The Eagle Ford Shale Assets add to the Company’s existing Eagle Ford Shale acreage position secured earlier in the year by way of two joint ventures. The Company estimates of proved reserves for the Eagle Ford Shale Assets are over 20 MMboe, which are approximately 55% oil and NGLs.
David Sambrooks, NFR's Chief Executive Officer, stated, "These acquisitions immediately result in a large, well balanced company with three major producing and development basins and exposure to oil, gas and NGLs. We will focus on high return development drilling directed at our new assets and expect to rapidly de-lever the balance sheet and further increase the Company’s liquids production. Pro forma, the Company is producing approximately 27,200 Boe/d (26% liquids) and has substantial drilling inventory of some of what we believe are the highest return projects in the U.S. onshore, reflected in our new estimated pro forma proved reserve base of 280 MMboe. "
Michael France, Managing Director of First Reserve, commented, "NFR has been a strategic investment for our firm since 2007 and we believe the assets acquired are an important and exciting part of the Company’s growth strategy moving forward. The track record of NFR’s management team speaks for itself and we are confident they will do a great job of developing these transformational assets. We look forward to continuing to work in close partnership with the NFR team in the future.”