Hugoton Basis Acquisition Closes in 2nd Quarter of 2013
Posted by Mary-Margaret
In April 2013, on behalf of its Fund IV, Foundation Energy closed the acquisition of a producing property package in the Hugoton Basin. The Hugoton Basin spans an area consisting of southwestern Kansas, the Oklahoma panhandle and the Texas panhandle. The Hugoton Field, first discovered in 1922, is the 9th largest wet gas field in the U.S. Hugoton reserves are well known for their long lives and many of the acquired wells have over 50 years of remaining reserve life.
The acquired properties include interests in 289 producing wells with current net production of approximately 4.35 MMcfpd (725 boepd.) Producing (PDP) reserves are estimated at over 23,000 MMcfe (3.8 million BOE.) In additon to current production, the acquisition includes approximately 99,000 net acres of leasehold that is mostly held by production (“HBP”.) The HBP acreage provides the fund with the right to drill in the future during the long remaining life of the producing reserves.
The acquisition was completed from a large U.S. independent and could lead to follow-on opportunities from the same seller. Additionally, many other large companies hold positions in the basin and could sell these holdings in the coming years.