GPOR Dedicates Acreage in Exchange for Infrastructure Buildout
Gulfport Energy (ticker: GPOR) is taking the next step in its recently acquired acreage, reaching a joint venture agreement with a wholly owned subsidiary of Rice Energy (ticker: RICE). The companies expect to invest approximately $640 million for associated midstream assets over the course of the next six years. Rice will construct and operate the assets, and in turn will own 75% of the joint venture while Gulfport will own the remaining 25%. Construction will commence immediately, and first delivery is expected in mid-2016.
A breakdown of the agreement is listed below:
- Approximately 77,000 leasehold acres
- Existing infrastructure in Monroe County, including an 11-mile gas gathering line and a 350 Mcf/d interconnect
- 50,000 horsepower of compression for transport to downstream delivery points
- Fresh water system
- 165 miles of dry gas gathering pipelines with capacity of 1,800 Mcf/d and interconnections to interstate pipelines
According to the release, the companies “plan to pursue additional third-party gas gathering and water services opportunities within a 340,000-acre area of mutual interest that will cover portions of eastern Belmont County and Monroe County, Ohio.” In the most recent presentations for each respective company, Rice held 55,500 net Utica acres and Gulfport held about 243,000 net acres.
The first stage of the joint venture began in October 2013, which involved the development agreement of four townships in Belmont. Gulfport and Rice operated two of the townships apiece.
Gulfport Acreage Details
The footprint involved in the joint venture stems from previous acquisitions from Paloma Partners III and American Energy – Utica, and the majority are located in Monroe County. Both acquisitions were initiated earlier this year for total consideration of more than $700 million, ultimately adding nearly 60,000 net acres to Gulfport’s asset.
GPOR/RICE Initial Joint Venture, announced October 2013
In its Q2’15 results, Gulfport averaged 458 MMcfe/d from the Utica and had 137 gross wells (104 net) online. Its footprint in the dry gas window of Ohio is the largest of any E&P. Management did not make any implications of seeking a joint venture in its quarterly conference call, but did mention the two recently completed deals added 335 net drilling locations and provided further framework to its near term drilling program.
The company reported 580 Bcfe of net proved dry gas reserves for the year-ended 2014.
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