Jones Energy Adds Anadarko Basin Assets

Jones Energy, Inc., an independent oil and gas company, announced Monday it has entered into a definitive agreement with a privately-held company to acquire producing and undeveloped oil and gas assets in the Anadarko Basin for $195 million. The assets acquired include approximately 26,000 net acres in the Cleveland, Tonkawa, and Marmaton plays in the Texas Panhandle and western Oklahoma.

Acquisition Highlights

  • 26,000 net acres in our core liquids-rich Cleveland play; over 90 percent held by production (HBP) and operated
  • 225 identified drilling locations with a high average working interest (70 percent)
  • 92 producing wells with net production of approximately 3,400 barrels of oil equivalent per day (boepd); 54 percent liquids
  • Proved reserves of 14.3 million barrels of oil equivalent (MMboe)
  • Significantly accretive to cash flow/share and accretive to earnings/share in 2014

Chairman and Chief Executive Officer of Jones Energy Jonny Jones commented, “This transaction increases our inventory of drilling locations in one of our core operating areas at an attractive valuation, providing us with increased visibility and sustainability of growth in this productive area. We are acquiring appealing assets in the heart of the liquids-rich fairway of our Cleveland play, where we have operated for over 25 years and drilled over 300 horizontal wells. Of the 225 high-quality drilling locations we are acquiring, over 185 are in the Cleveland play, where our costs are best in class. Jones Energy has a strong track record of identifying and integrating assets in areas we know well, and we expect these wells to deliver the same high returns as those drilled on our existing Cleveland acreage.”

The acquisition adds proved reserves of 14.3 MMboe and current net production of 3,400 boepd, of which 54 percent is liquids. These assets will bring Jones Energy’s total number of identified Cleveland drilling locations to over 680, providing over seven years of drilling in the Cleveland formation alone at the current pace of eight rigs. In addition to increasing the Company’s Cleveland inventory, the acquired properties add significant drilling locations in the Tonkawa and Marmaton plays. The Company confirms its previously announced plans to test the Tonkawa in the first half of 2014. As a result of this acquisition, the Company plans to add two rigs to accelerate its overall development program, bringing the total Company rig count from 10 to 12 rigs in 2014.

Jones added, “As we look ahead, we will continue to focus on a targeted number of core areas to capitalize on our operational expertise to drive low-cost production growth. Since most of the acquired acreage is HBP, we will have the flexibility to optimize drilling across our portfolio. In addition, assuming a successful outcome to the enhanced completion techniques we are currently testing, all of the acquired drilling locations will be developed using these techniques.”

The Company expects to finance the acquisition under its existing revolving credit facility and anticipates the transaction will close by the end of the year, subject to completion of due diligence and customary closing conditions.


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