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Resolute Energy buys USD135m Delaware Basin properties.

M2 EQUITYBITES-October 5, 2016-Resolute Energy buys USD135m Delaware Basin properties


Oil & gas company Resolute Energy Corporation (NYSE:REN ) revealed on Tuesday the launch of a definitive agreement to acquire certain oil and gas properties located in Reeves County, Texas, for a purchase price of USD135m (the Firewheel Properties) from Firewheel Energy LLC, a portfolio company of EnCap Investments.

The purchase price of USD135m is payable with USD90m in cash plus the issuance to Firewheel of 2,114,523 shares of its common stock.

As part of the agreement, the acquired Firewheel Properties consist of 3,293 net acres in the highly productive Delaware Basin operating area, including interests in 13 horizontal and 15 vertical wells, which produce 1,200 net Boe per day. About 95% of the acreage and substantially all of the production and proved reserves are located within the Resolute-operated Mustang project area in Reeves County. The Firewheel Properties contain estimated proved reserves of 6.2 MMBoe with PV-10 of USD45.8m.

In conjunction, the acquisition includes Firewheel's interest in the Earn-Out Agreement (to which we are also a party) with Caprock Permian Processing and Caprock Field Services (collectively, "Caprock"). Following the closing, Resolute will receive 100% of all payments from Caprock under the Earn-Out Agreement.

Subject to the satisfaction or waiver of certain customary conditions, including the material accuracy of the representations and warranties of us and Firewheel, the transaction is expected to close on 7 October 2016. The transaction has an effective date of 1 September 2016.

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Publication:M2 EquityBites (EQB)
Date:Oct 5, 2016
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