EV Energy Partners (EVEP) announced Friday that it, along with certain institutional partnerships managed by EnerVest, has signed an agreement to divest certain acreage in Ohio's Utica Shale for $284.3 million to an undisclosed buyer.
The total acreage associated with this sale includes 22,535 acres in Guernsey, Harrison and Noble counties. Of that total, EVEP is selling 4,345 acres for approximately $56 million, net to its ownership interest. EVEP will retain its overriding royalty interests in these acres. The transaction is expected to close by the end of the third quarter and is subject to customary closing conditions and purchase price adjustments.
A map depicting the acreage location is available on the Investor Relations page on the company's website. As previously disclosed, Jefferies LLC is advising EVEP as it continues to market its Utica acreage.
"This is a good first step in our revised Utica acreage sale process," said John B. Walker, EVEP chairman, in a Aug. 9 press release. "The value of this sale averages $12,900 per acre. We look forward to announcing additional deals as they occur."
In addition to the acreage sale, EVEP is pleased to announce the opening of the Utica East Ohio (UEO) midstream facilities, which started processing gas in July. The facility is processing more than 85 million cubic feet per day (MMcf/d) of wet gas, has a capacity of 200 MMcf/d, and throughput is expected to increase steadily over the next few weeks as additional wells are turned in line. With UEO and other processing facilities now available, more Utica wells are being turned in line, which is increasing the flow of gas through the Cardinal Gas gathering system. Increased volumes and cash flow are anticipated for the rest of this year and into 2014.
Recently, EVEP entered into an amendment to its credit facility to change the senior secured debt to EBITDAX ratio to be no greater than 3.5 to 1 through March 30, 2015 and to include certain updates related to the Dodd-Frank Act eligibility requirements for guarantors of hedging transactions.
Second Quarter 2013 Results
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