Page 10 - NorthAmOil Week 42 2022

NorthAmOil NEWS IN BRIEF NorthAmOil

UPSTREAM with room for further asset and revenue Summit Midstream Holdings, has entered
growth. into definitive agreements with Outrigger
HNRC to acquire additional completed an evaluation of the oil and gas Energy II to acquire Outrigger DJ Midstream
An independent engineering company has
and with Sterling Investment Holdings
interest in Cunningham assets of Cunningham Energy. The appraised to acquire Sterling Energy Investments,
value of the company’s leasehold position as
Grasslands Energy Marketing and Centennial
Energy of May 18, 2022, is $218 million, assuming the Water Pipelines (collectively, “Sterling
current proposed 40-well drilling programme
DJ”), which own natural gas gathering and
Houston Natural Resources Corp. (HNRC) is completed. The acquisition of the 9% processing systems, a crude oil gathering
announced today that it extended its letter of interest of Cunningham Energy, in cash and system, freshwater rights, and a subsurface
intent to acquire additional interest, for up to securities, is valued at $19,620,000, which freshwater delivery system in the DJ Basin for
100% interest in Cunningham Energy on or increases the company asset value by $0.39 per cash consideration of $305 million, subject
before December 31, 2022. share to $2.82 per share from $2.43 per share, to customary transaction adjustments. The
The company has previously announced up 16% as reported in their Q2 financials an Outrigger DJ and Sterling DJ consolidated
the competition of the acquisition of a 9% August 1, 2022, based on the current shares asset portfolio is located in Weld, Morgan,
interest of Cunningham Energy, in cash and outstanding. and Logan Counties, Colorado and Cheyenne
securities, valued at $19,620,000. With this acquisition, the company further County, Nebraska. The transactions are
HNRC will utilise an existing special expands its interest in oil, natural gas and oil expected to close during the fourth quarter
purpose acquisition corporation with cash field services properties. It further expands of 2022, subject to customary regulatory
and securities for the acquisition of the its overall business interest to Canada and is approvals.
additional interest in Cunningham Energy looking to increase expansion internationally. Heath Deneke, president, chief executive
with the purpose of acquiring, exploring, and HOUSTON NATURAL RESOURCES CORP., officer and chairman, commented: “We
producing oil and gas in the United States October 17, 2022 are excited to announce the expansion of
and Canada. The proposed investment is for our DJ Basin presence with these strategic
up to $100,000,000 in cash and securities and Summit Midstream Partners bolt-on acquisitions. These highly value- and
subject to the competition of due diligence credit-accretive transactions create a strategic
and financing. The parties are committed announces synergistic franchise position in the DJ Basin that we
to closing the transaction on or before believe will generate significant free cash
December 31, 2022. Under the letter of intent and accretive bolt-on flow growth for Summit in the coming years
additional future development funding for while immediately enhancing the quality
up to $600,000,000 from SPAC and PIPE acquisitions in the DJ Basin and availability of services for our combined
follow on transactions are also planned. These customer base in the region via the integration
acquisition interests bring HNRC into the Oil Summit Midstream Partners announced of our underutilised Hereford gathering
& Gas Exploration and Production business today that its wholly owned subsidiary, and processing system with the capacity
constrained Sterling DJ and Outrigger DJ
systems. Combining operations of the three
systems will create significant commercial
and operating synergies and will provide
substantial running room to grow dedicated
producer volumes in the coming years with
minimal capital expenditure requirements.
Outrigger DJ and Sterling DJ customers are
expected to connect over 75 new wells in
2023 and are well positioned to sustain and
potentially grow that level of development
activity in the coming years with more than
675 active permits currently held on dedicated
acreage. Furthermore, given the prevalence
of gas processing constraints across the DJ
Basin, the connectivity of the combined asset
footprint with other gathering systems and
the integration of the underutilised Summit
Hereford and Sterling DJ Jackson Lake
processing complexes, we believe there will be
additional near-term upside opportunities to
grow volumes both organically and through
offload arrangements with other midstream
operators in the basin.”
SUMMIT MIDSTREAM PARTNERS, October 17,
2022

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