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American Energy Partners spending $4B to acquire new acreage

Jay Marks Published: June 9, 2014
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American Energy Partners LP is spending more than $4 billion to increase its industry-leading position in Ohio’s Utica Shale and move into the Permian Basin and Marcellus Shale for the first time.

The company, which was founded by Aubrey McClendon last April, announced the moves early Monday morning.

The most expensive deal is American Energy-Permian Basin LLC’s $2.5 billion acquisition of 63,000 net acres in west Texas from affiliates of Denver-based Enduring Resources LLC. The properties are expected to produce about 16,000 barrels of oil equivalent a day when the deal closes.

Enduring Resources currently operates four rigs in the acreage, but American Energy expects to increase that to as man as eight rigs by the end of next year, with plans to drill as many as 1,750 net wells there over the next decade. The company also intends to build its Permian Basin acreage with future acquisitions.

American Energy’s other two deals carry a combined price of $1.75 billion.

American Energy-Utica LLC is adding 27,000 net acres in Monroe County, Ohio, from East Resources Inc. and an unidentified private company. It already has amassed the largest acreage position in the play in a series of earlier transactions.

Another McClendon affiliate, American Energy-Marcellus LLC, has agreed to acquire about 48,000 net acreages in five West Virginia counties from the same sellers. The Marcellus Shale acreage is expected to be producing about 135 million cubic feet of natural gas equivalent a day by the time the deal closes in the next 60 days.

The deal marks American Energy’s first move into the southern Marcellus Shale, establishing a strong foundation from which it plans to build a stronger position over time.

McClendon’s companies plan to deploy four to six rigs by the end of 2015 on the acreage it is acquiring, up from two being used by the current operators.

American Energy Partners has raised about $10 billion in committed equity and debt capital over the past nine months to fund the development of five specific companies. Those companies are focused in the Permian, Marcellus, Utica and Woodford shales, with another dedicated to acquiring non-operated interests.

The companies’ lead equity investor is The Mineral and Energy Group, with additional funds coming from American Energy’s management and other investors, including First Reserve Corp. in the Utica.