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Permalink Reply by ray schmidt on August 21, 2016 at 7:39

Who is Covey park gas LLC and can they drill a good well?

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Permalink Reply by Skip Peel - Mineral Consultant on August 21, 2016 at 7:51

ray, Covey Park is a private energy company that acquired the interests of EP Energy.  EP Energy was the operating subsidiary of El Paso that was created to sell off their wells and development rights.  El Paso was primarily a pipeline company but did have significant drilling and development assets.  I don't doubt that they have the ability to drill a good horizontal Haynesville well but they have only drilled three to date and they are shut in at this time.  Here is the company's two press releases since acquiring the EP assets and a link to the company's website.

Covey Park Announces Acquisition of Haynesville and Bossier Assets

Dallas, March 23, 2016 – Covey Park Gas LLC, a subsidiary of Dallas, Texas-based independent oil and gas exploration and production company Covey Park Energy LLC (“Covey Park”), announced it has entered into a Purchase and Sale Agreement with subsidiaries of EP Energy Corporation (“EP Energy”) to purchase all of EP Energy’s assets located in the Haynesville and Bossier shales. The total consideration to be paid is $420,000,000, subject to customary adjustments for this type of transaction. The transaction is expected to close in the second quarter of 2016, subject to certain customary closing conditions.

The assets, primarily located in Louisiana’s DeSoto and Bossier Parishes, consist of approximately 52,933 gross 34,167 net acres with Q4 2015 average production of 113 mmcf/d.

Pro forma for the acquisition, Covey Park will own approximately 196,000 gross (137,000 net) acres of leasehold in Texas and Louisiana. Daily net production will increase to approximately 200mmcf/day. Total proved reserves will be approximately 2 TCF.

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Covey Park Energy to Pursue Ark-La-Tex, Permian and Mid-Continent Opportunities Following Commitment from Denham Capital

04/01/14

Dallas – (April 1, 2014) – Covey Park Energy (CPE) announced today that it has secured an equity commitment from energy and resources-focused global private equity firm Denham Capital. The newly-formed, Dallas-based exploration and production company is primarily focused on the acquisition and exploitation of long-life reserves in the Ark-La-Tex, Permian and Mid-Continent regions.

 CPE is managed by Co-Chief Executive Officers John D. Jacobi and Alan Levande. Jacobi is an accomplished oil and gas entrepreneur who has worked in the Ark-La-Tex regions for more than 20 years and served on the boards of three exploration and production ventures previously. Levande has enjoyed entrepreneurial success in private equity and worked for a decade with Goldman Sachs as Managing Director of Investment Banking in the company’s Natural Resources Group.

 Together they will lead a 12-person team which has collectively completed more than $10 billion worth of acquisitions and divestures. The duo will drive efforts to add value to acquisitions through low-risk development opportunities, optimized operations and ongoing technological advances. CPE will evaluate transactions ranging from $20 million to $2 billion, and will also consider other attractive onshore opportunities throughout the continental U.S.

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About Covey Park Energy

Covey Park Energy is an independent oil and gas exploration and production company headquartered in Dallas, Texas. The company is primarily focused on the acquisition and exploitation of long-life reserves in the Ark-La-Tex and Mid-Continent regions. Covey Park was formed in June 2013 with an equity commitment from Denham Capital. For more information about the company, visit www.coveypark.com.

About Denham Capital

Denham Capital is a leading energy and resources-focused global private equity firm with more than $8.4billion of invested and committed capital across eight fund vehicles and offices in Houston, London, Boston, São Paulo and Perth. The firm makes direct investments in the energy and resources sectors, including businesses involving oil and gas, power generation and mining, across the globe and all stages of the corporate lifecycle. Denham’s investment professionals apply deep operational and industry experience and work in partnership with management teams to achieve long-term investment objectives. For more information about Denham Capital, visit www.denhamcapital.com.

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Permalink Reply by ray schmidt on August 21, 2016 at 8:05

Thanks Skip! It seems Covey is drilling Haynesville wells in some of the sections that Indigo bought from BEUSA.They must have some kind of partnership with Inigo.

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Permalink Reply by Skip Peel - Mineral Consultant on August 21, 2016 at 8:12

I don't think those are in Indigo/BEUSA units although they are close.  If BEUSA only had the rights to the CV and El Paso had the Haynesville, that could be correct.  BEUSA, like many operators that drilled HA wells, did not acquire their leases for the Haynesvile.  They acquired all depths leases in their operating area going back 4 or 5 years prior to the start of the Haynesville.  They were drilling CV and HO vertical wells.  Indigo has transitioned to drilling only HA wells of late in the former BEUSA units.  Wherever BEUSA had the rights to the Haynesville, I expect Indigo will drill HA wells.  They are moving aggressively to do so now with two rigs running.

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Permalink Reply by ray schmidt on August 21, 2016 at 8:43

As always you are correct.I have former BEUSA now Indigo lease and am hopeful that Indigo can drill good wells since Covey is not drilling them

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Permalink Reply by Skip Peel - Mineral Consultant on August 21, 2016 at 8:49

When the acquisition of the BEUSA units was announced, in an earlier discussion thread, the question came up about Indigo's ability to drill horizontal HA wells.  Jay answered that HA wells were easier to drill than the horizontal CV wells that Indigo has been drilling for the last 5 or 6 years in that area.  I think Indigo will do just fine.

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