The Newpek acquisition includes approximately 5,700 net acres in Bee, DeWitt, Karnes, and Live Oak Counties
Ensign Natural Resources announced the purchase of Eagle Ford Shale (“EFS”) and Edwards (“Edwards”) acreage in South Texas from Newpek LLC (“Newpek”). The Newpek acquisition includes approximately 5,700 net acres in Bee, DeWitt, Karnes, and Live Oak Counties and current net production of approximately 2,200 barrels of oil equivalent per day. This acquisition increases Ensign’s current ownership in the leases and wells it acquired from Pioneer Natural Resources USA, Inc. (“Pioneer”) in 2019.
Ensign concurrently announced that it reduced its future gathering, processing and transportation rates with the Company’s primary midstream provider.
“We have been focused on securing incremental gains and improving our margins during this unprecedented downturn in the energy market,” said Brett Pennington, President and Chief Executive Officer of Ensign. “We believe these transactions will strengthen the asset and our relationship with key partners in the value chain, while lowering future gathering costs and increasing free cash flow. The commitment and support of our equity sponsors have allowed us to be nimble and capture value during these challenging times.”
Ensign was formed in late 2017 in partnership with Warburg Pincus, a private equity firm focused on growth investing. As part of the Pioneer acquisition, the Company also secured an equity commitment from the Kayne Private Energy Income Funds, an investment platform dedicated to partnering with high caliber management teams to acquire and develop large producing oil and gas assets in North America.
Sidley Austin LLP acted as legal counsel to Ensign.
Source: Company Press Release