Houston oil and gas producer EnerVest Ltd. said Monday it has either closed or agreed to seven oil and gas acquisitions worth a combined $1.4 billion since August, marking the fourth year in a row the private firm has bought more than $1 billion in U.S. assets.
And the firm has acquired around $1.5 billion in assets in three of the last four years.
“We’re one of the large buyers on the market,” said John Walker, president and chief executive of EnerVest, in an interview Monday.
Most of the firm’s deals will build its footprint in natural gas-heavy shale plays like the Anadarko Basin in Western Oklahoma and the Barnett Shale in North Texas. Even as natural gas prices sink and U.S. producers scramble to unload gassy assets in favor of oil, Walker said he’s optimistic about natural gas demand over the next four to five years.
“I don’t think any of us know” how much U.S.-produced natural gas is going to be exported or how much the power industry will switch from coal to natural gas-fired plants, but “the trend is clearly there,” Walker said.
Across the industry, private equity firms have this year turned to buying up natural gas assets discarded by U.S. producers, which are focused on higher-priced oily shale plays. Because of low natural gas prices, private players see natural gas as a better risk-return proposition, and have been fueling merger and acquisition activity this year.
The seven transactions added about 250,000 net acres to EnerVest’s portfolio and about 1.1 trillion cubic feet of natural gas equivalent in proved reserves. The largest deal, in which EnerVest paid $396 million for 95,000 net acres in the Anadarko Basin, closed in September.
EnerVest raises its own capital like a private equity firm and operates the oil and gas assets it acquires. It does not have portfolio companies, but it did form an upstream master limited partnership, EV Energy Partners, in 2006.
EV Energy Partners: EnerVest affiliates to snap up Barnett Shale assets
SM Energy agreed to sell the Houston firm more assets in the Anadarko Basin for $343 million. EnerVest got 58,000 net acres and proved reserves of 143 billion cubic feet equivalent in the deal.
The firm is for the first time adding operations in the Uinta Basin in Utah, grabbing $325 million in assets that produce 67 million cubic feet per day, the largest daily production in EnerVest’s batch of deals.
Four smaller deals added to EnerVest’s operations in the Barnett Shale in North Texas and the San Juan Basin in New Mexico. The firm bought $240 million in Barnett assets in two deals that added 251 billion cubic feet equivalent to its proved reserves there. And EnerVest snapped up $75 million in San Juan assets, which brought the firm’s proved reserves in the region up by 81 billion cubic feet equivalent.