Kalnin Ventures LLC announced today that an affiliate of its BKV Oil and Gas Capital Partners, LP fund has entered into purchase and sale agreements with respect to the fund’s sixth acquisition in thirty months in the Northeast portion of the Marcellus Shale.
Kalnin said it expects the deal to close by the end of December 2017.
The Fund is financially backed by its sole investor, Banpu Pcl, a Thailand-based coal mining and power-generation company with total assets of approximately $7 billion.
The transaction with Warren Resources, Inc. includes Warren’s entire Northeast Marcellus position and is valued at $105 million, with potential of two additional payments of $3.75 million each over the next two years, depending on natural gas prices. This acquisition takes the Fund’s acquisition tally up to $522 million invested in the Marcellus to date.
According to Warren Resources’ website, the company has 6,982 gross (5,289 net) contiguous acres in Wyoming County, Pennsylvania. Kalnin paid approximately $19,852 per acre according to these acreage numbers. Average net production in June 2014 was approximately 82.0 MMcf/d. The company’s website has not been updated since 2014.
Located in Pennsylvania’s Wyoming County, the assets provide Kalnin with operating cash flow from 35 producing wells, with additional development potential in the supercore of the Northeast Marcellus through another 23 proven and undeveloped (PUD) well locations in the lower Marcellus. Total 1P reserves for the acquisition are estimated at 292 Bcf. The deal value equates to $0.36 per Mcf of reserves.
Upon completion of this transaction, the fund will operate over 115 producing wells and have interests in 330 gross wells across of over 60,000 net acres across in its portfolio. These transactions provide the fund with projected net natural gas production of over 200 million cubic feet per day.
“This deal is perfectly synergistic with our previous deals in Wyoming County, Pennsylvania and allows us to integrate two separately operated fields into a single larger field that is more efficient and at scale,” said Christopher Kalnin, Managing Director and Co-founder of Kalnin Ventures LLC. “We continue to consolidate and expand our working interests in this region, as we believe in the long-term outlook for gas, especially in the conjunction with growth in renewables,” said Kalnin.
The acquisition follows the Fund’s previous transactions with Carrizo (Marcellus) LLC and Reliance Marcellus II, LLC; Zena Energy LLC; Radler 2000 LP – Tug Hill Marcellus, LLC; Chief Exploration and Development LLC; and Range Resources – Appalachia, LLC, all located in the productive Marcellus Shale.
