Partnering for a third time, GE Energy Financial Services, a unit of GE, and GeoResources, Inc., a Houston-based exploration and production company, are investing up to $90.5 million to acquire and develop proven producing oil and gas reserves in Oklahoma.
GE Energy Financial Services and GeoResources formed a new partnership, OKLA Energy Partners, LP, to acquire 82 percent of the assets from a group of private sellers. A wholly owned subsidiary of GeoResources will purchase the remaining 18%. The two entities entered into a purchase and sale agreement with the sellers to acquire the reserves for $60.5 million and expect to invest up to $30 million to develop additional proven reserves. The GE unit is investing 98% as limited partner in OKLA Energy Partners and GeoResources is investing 2% as general partner and operator. GeoResources' ownership in OKLA Energy Partners may increase based upon the partnership's performance. The acquisition is expected to close later this month.
The properties include more than 200 producing wells in multiple fields across Oklahoma and more than 90 drilling locations mostly classified as proved undeveloped. Current production is approximately 90 percent natural gas. Additional financial and operational details of the transaction were not disclosed.
"This transaction is consistent with GeoResources' business strategy, which focuses on building reserves, production, cash flows and earnings and on expanding our acreage, development opportunities and exploration inventory," said Frank A. Lodzinski, Chief Executive Officer of GeoResources. "The Oklahoma properties bring long-lived gas reserves and a large drilling inventory to our portfolio, establishing a significant footprint in Oklahoma for future expansion."
GE Energy Financial Services partnered with a predecessor entity to GeoResources in 2003 to purchase oil and gas reserves located in Texas and the Louisiana Gulf Coast. The GE unit later sold its limited partner interest in these assets to GeoResources in the fourth quarter of 2007. In early 2007, GE Energy Financial Services again partnered with GeoResources to acquire oil and gas properties in the Giddings field in Texas.
"By again combining GE Energy Financial Services' financial resources and industry knowledge with GeoResources' demonstrated operational expertise, we expect strong results from our new high-potential reserves in Oklahoma," said John Schaeffer, Managing Director and head of the oil and gas unit at GE Energy Financial Services.
Most Popular Articles
From the Career Center
Jobs that may interest you