Elk Petroleum to acquire Resolute Energy’s subsidiary for $160m

Elk Petroleum has signed an agreement to acquire a subsidiary of Resolute Energy, which holds majority ownership in the Greater Aneth oil field in south-eastern Utah, US, for $160m.

The proposed acquisition will give Elk around 63% interest and operatorship of a Rocky Mountain CO2 EOR project, and is expected to add about 59 million barrels of 2P oil reserves, as well as 6,500 barrels of oil per day (bopd) oil production to the company’s portfolio.

In addition, the company estimates next year’s net production to be around 11,000bopd, while it intends to double its production to more than 14,000bopd within three to five years through the acquisition.

Elk Petroleum managing director Bradley Lingo said: “The Aneth oil field is one of the most significant EOR projects in the US, underpinned by a high-quality and established operating and management team.

“The field is highly complementary to Elk and represents an attractive opportunity for Elk to transform into one of the ASX’s leading oil companies and operators by reserves, production and cash flow.”

The remaining working interest in the field is located on Navajo Nation lands and held by Navajo Nation Oil and Gas Company (NNOGC).

Pursuant to the agreement, additional payments of up to $25m should be paid to Resolute by Elk over the next three years through to 2020.

The acquisition is expected to be closed by the end of next month.