With the initial Oklahoma closing in January and this closing, Enterra has added an estimated 5,000 barrels of oil equivalent per day (BOE/d) at an average purchase price of $43,900 per BOE/d. The sellers were paid $92 million in units of Enterra (5,178,792 units), $69 million in cash, and $60 million in assumption of liabilities (some of which were paid at closing).
Enterra anticipates additional related add-on closings over the next 30 days for a number of small remaining working interests in the Oklahoma properties at similar purchase prices. Once these transactions are completed, the oil and gas production mix of the acquired properties will consist of approximately 80 percent natural gas and 20 percent light oil. It will add on the order of 6,300 BOE/d to Enterra's existing production rate, bringing overall production to approximately 16,000 BOE/d.
The assets include approximately 53,000 net acres of land, of which nearly 25,000 net acres are undeveloped. As previously announced, Enterra has entered into a farmout agreement with Petroflow Energy whereby Petroflow will fund 100 percent of the drilling and completion costs on the undeveloped lands to earn a 70 percent working interest. Enterra retains a 30 percent working interest from the day the additional production generated by Petroflow's drilling activities begins.
"This transaction is highly accretive and will enhance Enterra's financial strength," said Keith Conrad, Enterra's president and CEO. "In addition, this acquisition is important to Enterra for a number of reasons. First, it provides us with a new core area of operations, which is a key element of our strategy. Second, we feel there is significant upside potential to be developed beyond the initial proven reserves we purchased. Third, we are very excited to add to the Enterra family, Kim Booth, the chief operating officer of Altex Energy Corporation, and her team, who have been developing and operating these assets for the past several years."
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