PETROHAWK TO SELL PERMIAN BASIN ASSETS FOR $376M
DOW JONES NEWSWIRES
Petrohawk Energy Corp. (HK) has agreed to sell its Permian Basin properties to a unidentified privately held company for $376 million as it focuses on its growing Haynesford and Eagle Ford shale assets.
Proceeds from the sale, expected to close Oct. 30 with an effective sale date of July 1, 2009, will help boost the natural gas company's "already strong" liquidity, said Chairman and Chief Executive Floyd C. Wilson.
Petrohawk and other natural gas producers have been hurt by weak prices and swelling inventories. Many that borrowed heavily to fund expansion when energy prices were soaring have been getting squeezed. Petrohawk has posted a string of losses in recent quarters.
The company last year reported estimated proved reserves of 177 billion cubic feet equivalent for the Permian Basin properties, which currently are producing about 30 million cubic feet equivalent a day. They are located in Texas.
Petrohawk last month sold nearly $600 million in stock, boosting shares outstanding some 10%, joining multitudes of other companies that have used the stock market's rebound to raise capital from investors.
Shares closed at $23.63 on Friday and didn't trade premarket. The stock is up 51% this year.
-By Tess Stynes, Dow Jones Newswires; 212-416-2481; tess.stynes@dowjones.com
Petrohawk Energy Corp. (HK) has agreed to sell its Permian Basin properties to a unidentified privately held company for $376 million as it focuses on its growing Haynesford and Eagle Ford shale assets.
Proceeds from the sale, expected to close Oct. 30 with an effective sale date of July 1, 2009, will help boost the natural gas company's "already strong" liquidity, said Chairman and Chief Executive Floyd C. Wilson.
Petrohawk and other natural gas producers have been hurt by weak prices and swelling inventories. Many that borrowed heavily to fund expansion when energy prices were soaring have been getting squeezed. Petrohawk has posted a string of losses in recent quarters.
The company last year reported estimated proved reserves of 177 billion cubic feet equivalent for the Permian Basin properties, which currently are producing about 30 million cubic feet equivalent a day. They are located in Texas.
Petrohawk last month sold nearly $600 million in stock, boosting shares outstanding some 10%, joining multitudes of other companies that have used the stock market's rebound to raise capital from investors.
Shares closed at $23.63 on Friday and didn't trade premarket. The stock is up 51% this year.
-By Tess Stynes, Dow Jones Newswires; 212-416-2481; tess.stynes@dowjones.com
Views: 53
Replies to This Discussion
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Permalink Reply by Skip Peel - Mineral Consultant on
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IMO, the competition for additional leasehold, especially in the eastern and southern areas of the Play, and the need to begin development of existing leasehold nearing lease term expiration has forced Petrohawk to raise capital. The asset sale and successful stock offering should allow them to meet development schedules and remain competitive in leasing the expanding areas of the Play. I suspect we will see an increase in HK unit applications especially in the southern townships where the company has been conspicuously less active.
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Permalink Reply by Catfish on -
Thanks Skip, no doubt about it more dollars will be rolling into our local economy and more landowners pockets.
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Permalink Reply by Sandstone on
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Thanks for the information Skip.
"unidentified privately held company" - I bet a permit for a new mosque in the area will be filed also.
The U.S. losing control of these natural resources is not in our country's best interest IMO.
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Permalink Reply by Skip Peel - Mineral Consultant on
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Sandstone. Private equity firms have been acquiring energy assets at bargain prices since the credit market contracted a year ago. There is nothing out of the ordinary or suspicious about this transaction that I am aware of. Conspiracy theories belong on the Political Group page.
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Permalink Reply by Sandstone on
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You are right Skip, it should not have been posted on your discussion. I don't think of it as a "conspiracy theory"; just a need for an energy policy.
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Permalink Reply by Martin on
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Sandstone --
just a quick thought -- if there was a federal energy policy which dictated ownership and sale of in the ground fossil energy -- would that mean that we could kiss the free market goodbye as far as those resources are concerned? Pardon the intrusion of a political thought on an informational thread....
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Permalink Reply by Skip Peel - Mineral Consultant on
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I think substantive debate on national energy policy fits in just fine here on GHS however I would appreciate it if you guys would start a separate discussion topic for it.
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Permalink Reply by Skip Peel - Mineral Consultant on
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As has been discussed numerous times, developing the HS is more akin to manufacturing than to the exploration and production of conventional resource plays. Our favorite reminder of that being the phrase, "no dry holes". Therefore the most efficient means to do so is "development blocks" (multiple contiguous units/sections). When you review the sections under unit order to the major operators while looking at your township grid, you find clusters. The more contiguous the sections, the better. When I look at the townships in the southern reaches of the Play, I see the following Petrohawk units: 9N - 14W - Sections 3 & 12, 10N - 14W - 25, 27 & 35, 11N - 10W - Section 23, 11N - 14W - Section 28 (KCS), 12N - 10W -Sections 4 & 5, 12N -11W - Section 26. Just a sampling of isolated, in many cases non-contiguous units. Since Chesapeake and Encana have upped the ante in the south, Petrohawk had to raise money to compete or risk the possibility to loose much of their opportunity to build development blocks. Competition is always good for the unleased mineral owner. It will be interesting to see where Petrohawk chooses to spend their new investment dollars. I believe that a good chunk will go to building development blocks around these existing units.
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Permalink Reply by Joe Hahn on
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Skip, have you heard any news as to the ante Cheasapeake and Encana are offering in the south?
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Permalink Reply by Skip Peel - Mineral Consultant on
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No, Joe. I haven't received any recent reports of offers.
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Permalink Reply by Henry on
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Joe,
Go to the Sabine Parish group site and you will see offers of $5000/25% and higher in the southern area of the Haynesville Shale. These tend to be made to people who are in a section where someone wants to drill. Offers are rising, so there is no need to rush in. Get a lease with conditions that you can live with.
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Permalink Reply by Skip Peel - Mineral Consultant on
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Good advise, Henry. Ditto.
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