Denver-based Carbon Natural Gas Co. has acquired 780,000 net acres from conventional non-shale leases and 3,100 miles of pipelines, mostly in West Virginia, for $41.3 million, Kallanish Energy reports.
The purchase was made by the company’s Carbon Appalachian Co. affiliate.
The sellers were not identified.
The assets currently produce about 37,400 net daily cfe of natural gas and the production is 99% natural gas, the company said in a statement.
It said about 84% of the assets are held by production.
The assets have 275 bcfe of proved developed producing reserves, the company reported.
The assets will be blended into Carbon’s Southern Appalachian Basin operations and midstream infrastructure.
Carbon and its affiliates have about 65,000 mcfe of net daily production from 7,900 conventional wells, estimated proved reserves developed producing reserves of 436 bcfe and 4,700 miles of natural gas pipelines and 1.7 million acres.
It is the company’s third transaction this year. It had earlier bought convention wells in West Virginia, Ohio and Virginia from Cabot.
With the deal closing, Carbon increased its ownership in Carbon Appalachian to 19.37%. Carbon can earn additional ownership interests after a return threshold is met.
Carbon is the manager of Carbon Appalachian and is reimbursed by Carbon Appalachian for general and administrative expenses associated with the management of the assets.
Carbon Appalachian was formed in December 2016 by Carbon and two institutional investors with an initial equity commitment of $100 million.
The company has said it intends to drill in the Chattanooga Shale in Tennessee.