McClendon venture to enter shale territories in $4.25B deal

HOUSTON – American Energy Partners said Monday it plans to spend $4.25 billion to expand into Texas and West Virginia for the first time and to snap up more land in Ohio.

The three announced acquisitions are the latest — and the most expensive — in a series of moves by Aubrey McClendon, one of the first wildcatters to capitalize on the U.S. shale boom, to rebuild his empire after he relinquished his perch at the top of Chesapeake Energy last year.

McClendon’s new venture has amassed 260,000 net acres in the Utica Shale in Ohio and, since October, has raised about $10 billion in equity and debt to pay for more land in major U.S. shale plays. One of its affiliates is expected to go public for $2 billion sometime in the next two years

Private equity firms including Houston-based Energy & Minerals Group and Greenwich, Conn.-based First Reserve have bankrolled much of the company’s growth since McClendon left Chesapeake last April amid scrutiny over perks and the company’s rising debt.

Two of the three deals announced on Monday marked American Energy’s entry into the Marcellus Shale in West Virginia and the Permian Basin in West Texas.

Oklahoma City-based American Energy expects to pump 16,000 barrels of oil equivalent per day from 63,000 net acres in the southern Permian, and it plans to ramp up its drilling activity from four rigs to between six and eight rigs by the end of next year. It said it may drill 1,750 net wells on the land over the next decade, and plans to buy more land in the Permian over time.

Report: Horizontal rigs surging in Permian Basin

In the Marcellus, the company could produce 135 million cubic feet of natural gas per day from 48,000 net acres in West Virginia. It anticipates it will boost drilling from two rigs to between four and six rigs by the end of 2015, churning 355 net wells in the region in coming years.

Before Monday, the company had spent $3.5 billion on collecting land in the Utica, where it plans to drill 1,600 net wells in coming years. The new deal adds 27,000 net acres to the company’s collection in the region and 40 million cubic feet of natural gas equivalent per day in production.


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