American Energy Affiliate Ups Activity in Permian Basin

The Permian Basin affiliate of American Energy Partners LP just bought shale oil assets in the Permian Basin for $725 million, the company announced during the week.

Since the end of July, American Energy-Permian Basin, LLC (AEPB) has acquired a leasehold of 27,000 net acres in the Permian Basin, and bought 1,400 barrels of oil equivalent per day (boepd).

The company expects that it will recover 527,000 barrels of oil equivalent (boe) per well from its Wolfcamp A and B wells on a two-stream basis. It expects to recover about 579 million barrels of oil equivalent on a three-stream basis at a cost of about $8.45 million in 2015, $7.25 million in 2016, and $7 million in 2017 and beyond.

AEPB expects to have 12 horizontal rigs in operation in the formation by the end of 2015. It currently operates five rigs in the formation.

The American Energy activity in the Permian Basin follows an announcement in June that it was buying $4.25 billion in shale formation oil and gas assets.

AEPB intends to offer $800 million of junior subordinated notes due in 2022 in an unregistered offering to institutional investors.

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