Replies to This Discussion

Permalink Reply by Skip Peel - Mineral Consultant on August 25, 2015 at 1:38

And a good move for Encana mineral lessors I'd wager. 

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Permalink Reply by olddog573 on August 25, 2015 at 3:00

Based off activity alone the Vine acquisition of shells acreage has been positive for the Haynesville, hopefully this will play out the same.

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Permalink Reply by Skip Peel - Mineral Consultant on August 25, 2015 at 3:07

Since the majority of Haynesville Shale assets in LA were owned 50/50 by Encana and SWEPI this sale may actually allow Vine to boost development by having GeoSouthern Haynesvile as a willing Working Interest in the areas where they operate and visa versa.  They could also swap ownership interests so that each owned 100% in their operated wells/units.  You can bet there was some pre-sale discussion between Vine (Blackstone) and GeoSouthern Haynesville.

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Permalink Reply by Noah Brenner on August 26, 2015 at 10:02

GSO Capital Partners is a division of Blackstone so Blackstone is now involved on both sides of it- That should mean the companies will play well together but who knows.....

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Permalink Reply by kittycatmama on August 25, 2015 at 3:45

Jay, wasn't there a rumor going around that Carl Ichan was interested in CHK after he bought an interest in Cheniere.    EXCO is another worry. We have leases with all 3 so I am watching all closely

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Permalink Reply by Skip Peel - Mineral Consultant on August 25, 2015 at 4:34

Encana Corp. is exiting Louisiana through a proposed deal worth more than $1.3 billion US in cash and savings.

The Calgary-based oil and gas producer will receive $850 million US cash and reduce its commitments by about $480 million through the sale of its Haynesville natural gas assets in northern Louisiana, under an agreement announced Tuesday.

The buyer is GEP Haynesville LLC (GeoSouthern), a joint venture formed by GeoSouthern Haynesville LP and funds managed by GSO Capital Partners LP.

Encana will transport and market GeoSouthern’s Haynesville production on a fee for service basis for the next five years.

It has been sharpening its focus on four strategic areas — two in the southern United States and two in Western Canada.

“This is another step in advancing our strategy,” Encana president and CEO Doug Suttles said in a statement. “By further focusing our portfolio, we are making Encana more efficient as we proceed through the second half of 2015 and into 2016.”

The Haynesville deal is expected to close in the fourth quarter and become effective Jan. 1, after certain conditions are met.

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Permalink Reply by Skip Peel - Mineral Consultant on August 25, 2015 at 7:49

Jay, can you comment on GSO's "history of successfully drilling and developing horizontal shale assets"?  Where have they proven their horizontal development capability?

Quiet Woodlands company purchases $850M in shale assets

Aug 25, 2015, 10:56am CDT  bizjournals.com

The Woodlands-based GeoSouthern Haynesville LP and New York-based GSO Capital Partners LP have created a joint venture to acquire $850 million worth of Haynesville Shale assets from Denver-based EnCana Corp. (NYSE: ECA).

The 112,000-acre property, located primarily in the DeSoto and Red River parishes of Louisiana, contains 300 operated wells, according to a statement.

"Our new joint venture with GSO, coupled with our history of successfully drilling and developing horizontal shale assets, gives us great confidence in our ability to enhance the value of these leases," GeoSouthern President Margaret Molleston said in a statement.

The joint venture that purchased the assets is named GEP Haynesville LLC. GSO will receive preferred equity interests and a 10 percent common equity stake in the property.

GeoSouthern Haynesville's parent group, GeoSouthern Energy Corp., is the 12th-largest energy company in The Woodlands, based on number of employees, according to Houston Business Journal research. The quiet company made headlines in late 2013 when it agreed to sell Eagle Ford Shale... to Oklahoma City-based Devon Energy for $6 billion.

GeoSouthern was advised by Jefferies LLC, Kirkland & Ellis and Thompson & Knight in the transaction.

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Permalink Reply by Skip Peel - Mineral Consultant on August 25, 2015 at 9:11

That sound encouraging,  Thanks.

Permalink Reply by kittycatmama on September 10, 2015 at 13:35

Wonder if this new co. will do re-frac's and if so when they would start any operations

Permalink Reply by Noah Brenner on August 26, 2015 at 10:00

GeoSouthern developed a core position in the Eagle Ford and sold it to Devon for $6 billion- They built up 53,000 bpd of production at the time of the sale. My understanding is they were pretty well respected operationally- 

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Permalink Reply by Skip Peel - Mineral Consultant on August 26, 2015 at 10:07

And they are supported in this acquisition by Black Stone which owns the other half of the Haynesville acreage acquired from SWEPI.  Sounds better the more I hear about the details.  Plenty of operating capital and experienced field talent.  Now if a similar equity firm would acquire EXCO and keep their field and operations management personnel I'd be satisfied that the downturn in commodity prices ultimately brought a benefit to many Haynesville Shale mineral owners.

Permalink Reply by Bradley McWilliams on November 16, 2015 at 2:36

That's an interesting look on things, Skip.  Although the prices I'm sure have depressed the outlook in the HS, to get some of the acreage in the hands of companies that are nimble enough to work it in this environment is a good thing. I've seen lots of good acreage sit idle because the operator is just to big of an enterprise to maneuver as needed.

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