Ascent intends to finance the acquisition with a combination of available cash and borrowings under its revolving credit facility and has extended the maturity of its Credit Facility to June 2027
Ascent Resources has signed an agreement with an undisclosed seller to purchase all of its assets in the Utica Shale in Ohio, US, for a total consideration of $270m, subject to adjustments.
The US-based natural gas exploration and production company already owns working interests in a portion of the acquired assets.
Ascent said that the acquisition will help expand its asset base in the Utica Shale play by about 26,800 net acres and increase its net production by around 60mmcfe/d.
In addition, the acquisition will add a substantial inventory of identified drilling locations in both the Utica and Marcellus, which are expected to offer high-margin cash flow in the future.
Ascent intends to finance the acquisition with a combination of available cash and borrowings under its revolving credit facility.
The company has signed an amended and restated credit agreement with a group of banks to extend the maturity of the Credit Facility to June 2027.
In addition, it has increased its borrowing base to $3bn and its elected commitment amount of $2bn.
The company said that the acquisition requires no external financing and is immediately accretive to Adjusted Free Cash Flow and corporate returns.
The transaction is in line with its past practice, and a significant portion of the potential production from the assets would capture strong economics and returns, said Ascent.
Ascent chairman and chief executive officer Jeff Fisher said: “Through the acquisition, we have added high-quality acreage and production in the core of the Utica Shale at an attractive valuation, while also picking up prospective locations in the Marcellus.
“This transaction is immediately accretive to our financial metrics and returns while adding high-quality undeveloped inventory to our portfolio.
“The extension and increase of our credit facility provides the business with additional access to capital to execute on our long-term returns-based strategy.”