Ascent Resources to acquire assets in Utica Shale for $1.5bn

Ascent Resources has signed agreements to acquire natural gas and oil properties in the Utica Shale, US, for a total consideration of $1.5bn.

The assets being acquired belong to Hess, CNX Resources, Utica Minerals Development, and a fourth undisclosed seller.

Ascent will arrange funding for the transactions through at least $965m in common equity and up to $535m of loans under its revolving credit facility.

Through the deals, the company will acquire around 113,400 net leasehold acres, and royalty interests on 69,400 fee mineral acres, 93 operated wells and net production of roughly 216MMcfe/d.

The acquisitions also include more than 380 gross incremental horizontal well locations, as well as an increased working interest in over 900 gross horizontal well locations.

The properties are estimated to contain proved reserves and total resources of around 1.1Tcfe and 5.6Tcfe, respectively.

Ascent Resources chairman and CEO Jeff Fisher said: “The combination of these accretive bolt-on acquisitions is a milestone for the company and has been made possible by our outstanding operational success in the Utica Shale.

“We continue to consistently deliver basin-leading well results through our best-in-class operations and after completion of these acquisitions, we will become one of the largest privately held E&P companies in the US in terms of asset size and net production.”

“The acquired assets, more than 60% of which are fee mineral acres, further establish the company as a compelling Utica pure play and will significantly enhance the company’s growth and equity value.”

The company noted that the assets are largely contiguous with its existing acreage, with an opportunity to further improve capital efficiency.

Following the completion of the deals, which is anticipated in the third quarter of this year, Ascent is expected to have greater exposure to liquids.

The company has also increased its borrowing base to $1.4bn and the size of the credit facility to $2.5bn.