HOUSTON ( The Deal) -- Houston oil and gas explorer Memorial Production Partners ( MEMP) said Monday it agreed to buy oil producing properties in Wyoming from an unnamed seller for $935 million in cash.
Limited partner-owned Dallas oil and gas investor Merit Energy Co. owned the properties, a source said. Neither Merit nor Memorial Production Partners responded to requests for comment.
The partnership expects to close the purchase in the third quarter.
The properties consist of tertiary carbon dioxide floods in two fields in the Bairoil complex in Sweetwater and Carbon Counties. They are 100% operated, cover 6,800 net acres and include 140 producing wells and 166 injection wells. They have a projected average annual proved developed producing decline rate of 5% and estimated proved reserves of 83 million barrels, 59% of which are proved developed, and produce 5,900 barrels per day, 81% of which is oil and 19% of which is natural gas liquids.
"These assets complement our existing portfolio due to their very shallow decline rate, low operating cost structure and low maintenance capital requirements," chairman and CEO John Weinzierl said in a statement. "Given the long-life nature of these assets and the significant remaining oil in place, we expect these assets to create long-term value for our unitholders."
Bill Scarff, president of Memorial Production Partners' general partner Memorial Production Partners GP LLC, said the transaction expands the partnership's presence in the Rockies, lowers risk through a more balanced liquids profile and is an opportunity to acquire a very large resource base with low-decline production, which should provide a stable cash flow stream "for years to come."