Alta Mesa Exits Eagle Ford Shale in $210 Million Deal

Houston, TX-based Alta Mesa Eagle, LLC, a subsidiary of Alta Mesa Holdings, LP, will soon exit the Eagle Ford Shale, agreeing to sell its remaining assets to ReOil Eagle I, LLC in a$210-million deal announced on Dec. 10, 2014. ReOil will initially pay Alta Mesa $175-million, with an additional $25-million paid after the drilling of ten upper Eagle Ford Shale wells. ReOil Eagle I, LLC, has also agreed to pay an additional $10-million if the Calendar Year 2016 NYMEX strip closes above $80 per barrel for two consecutive months in 2015.

The properties included in the divestiture are primarily located in Karnes County, TX, and all are non-operated. At the end of 2013, Alta Mesa officials say the reserves associated with these properties were 7.3-million BOE, with 9% of the volumes classified as proved developed.

In March of 2014, Alta Mesa engaged in another large Eagle Ford Shale asset divestiture, selling 15,200 (800 net) acres in Karnes County to Houston, TX-based Memorial Production Partners for $173-million.

Read more: Memorial Production Partners Buys Eagle Ford Assets in $173-Million Deal

Alta Mesa's most recent transaction has an effective date of September 1, 2014. The effect of this transaction on the company's borrowing base is yet to be determined. The closing is expected in mid-January and subject to normal and customary closing conditions including approval of the transaction by Alta Mesa's Board of Directors.