Baytex Energy Tackles Eagle Ford Debt with Bakken Sale

SM Energy Pays Baytex $330.5 Million for North Dakota Bakken Assets

Calgary-based Baytex Energy, a recent entrant into the Eagle Ford, announced in late June of 2014 that it’s selling its Bakken Shale assets in North Dakota to pay down a portion of its Eagle Ford debt.

In February, the company added 22,200 net contiguous acres in South Texas through its $2.8 billion acquisition of Aurora Oil & Gas, which closed in June of 2014.

Read moreBaytex Energy – Aurora Deal for Eagle Ford Assets – ~$2.6 Billion

In anticipation of the Eagle Ford transaction, Baytex conducted a contingent resources assessment of its assets. During that process, the company earmarked certain properties for divestiture, including its Bakken assets.

Read more: Baytex Energy May Sell Bakken Assets

Baytex Eagle Ford Debt Primary Reason for Bakken Divestiture

SM Energy will pay Baytex $330.5 million for 61,000 net acres in the Bakken. The transaction is expected to close toward the end of the third quarter with after tax net proceeds from the sale, estimated at $275-million. Company officials say the money will be directly applied against outstanding bank indebtedness.

Read more: SM Energy Grabs 61,000 Bakken Net Acres – $330 Million


Aurora Oil & Gas’s Production Increases in the First Quarter of 2014

8 Net Ealge Ford Wells Put Into Production, 15 Net Wells Spud
Aurora Oil & Gas Production Chart

Aurora Oil & Gas Production Chart | Click to Enlarge

Eagle Ford-focused Aurora Oil & Gas, which will soon be absorbed by Baytex Energy, had first quarter estimated gross production of 28,600 (21,100 net) boe/d. That’s a 54% increase over the first quarter of 2013, and a 16% increase over Aurora’s fourth quarter production in the play.

In February of 2014, Baytex Energy agreed to purchase Aurora for $2.6 billion. When the deal closes, it will include 22,000 net contiguous acres in the Sugarkane Field. The acreage is located in what is commonly referred to as the “sweet spot” or oil window of the Eagle Ford Shale.

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Baytex Energy – Aurora Deal for Eagle Ford Assets – ~$2.6 Billion

Deal includes 22,000 net contiguous acres in the Eagle Ford's Sugarkane Field
Aurora Acreage

Aurora Acreage | Click to Enlarge

Canadian-based Baytex Energy agreed to buy Australian-based Aurora Oil and Gas for ~$2.6 billion dollars in early February 2014.

Aurora has approximately 22,000 net contiguous acres in the Sugarkane Field, located in the heart of the Eagle Ford Shale., with 97% held by production.

In March of 2013, Aurora purchased 27 net acres near the Sugarkane Field for $117 million.

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