Under the deal, Elk will acquire Resolute’s subsidiary, which has stake in Aneth Field of Paradox Basin located in Southeastern Utah, US.
As per terms of the deal, Resolute will secure $160m of cash at closing, as well as an additional amount of up to $35m based on increase of oil prices to certain levels in the next three years.
With a 30-year operating history and ~450MMbl cumulative production, the Aneth Oil Field si claimed to be one of the largest CO2 EOR projects in the Rocky Mountains.
Navajo Nation Oil and Gas owns the remaining working interest in the Aneth Field, which is located on Navajo Nation lands.
The deal will add 59mmbbls of 2P oil reserves and 6,500 barrels of oil per day (bopd) oil production to Elk Petroleum.
Resolute Energy CEO Rick Betz said: “This sale is the final step in our previously announced strategy to transform Resolute into a pure-play Delaware Basin company.
“Closing this transaction will significantly improve our cost structure, strengthen our balance sheet and position the Company to accelerate the development of our prolific Delaware Basin property and continue our strong growth profile.”
Elk Petroleum managing director Bradley Lingo said: “The Aneth Oil Field is one of the most significant EOR projects in the US, underpinned by a high-quality and established operating and management team.
“The field is highly complementary to Elk and represents an attractive opportunity for Elk to transform into one of the ASX’s leading oil companies and operators by reserves, production and cash flow.”
