Escalera expands its core assets with purchase from Warren Resources
Escalera Resources (ticker: ESCR) added to its core assets with the $47 million purchase of producing wells and leasehold interests from Warren Resources (ticker: WRES) in the Atlantic Rim Area of Wyoming. The assets are complementary to ESCR’s current holdings, according to a company press release.
The assets include Warren’s 74% operated working interest in the Spyglass Hill Unit, in which Escalera already holds a 22% non-operated working interest, an 11% non-operated working interest in Escalera’s Catalina Unit, which Escalera operates with an 86% interest, and midstream gathering and pipeline assets within the Spyglass Hill Unit. Current production from the assets is approximately 14 MMcf/d and proved developed reserves were 83 Bcf as of April, 1 2015.
The Catalina Unit has a three year average LOE of $0.92/Mcf, with 36.4 Bcfe of net proved reserves, according to a company presentation. Prior to the transaction, Escalera had 200 gross (47 net) wells in the Spyglass Hill Unit, with the potential for 1,225 more drilling locations.
Charles Chambers, Escalera’s CEO commented, “This acquisition will consolidate the major operating and economic interests in the Atlantic Rim, and is expected to be immediately accretive to cash flow, allowing for a more cost efficient capital allocation and decision-making framework for operations in the area moving forward.”
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