KKR affiliate Venado Oil and Gas has signed an agreement to acquire oil and natural gas assets in South Texas from Exco Resources for around $300m.
Under the deal, Venado will acquire interests in oil and natural gas properties and surface acreage in Zavala, Frio and Dimmit counties in Texas. During December 2016, the divested assets have produced around 4,100 barrel of oil equivalent (BOE) per day.
Exco has divested the oil and natural gas properties, as part of the portfolio optimization initiative and to improve its financial flexibility.
The company is planning to use the proceeds from the deal to fund drilling and development of its core Haynesville and Bossier shale assets in North Louisiana and East Texas, in addition to other general corporate purposes.
The borrowing base under the revolving credit agreement will be $100m, after the closing of the deal.
Subject to customary closing conditions, the deal is expected to complete in the June this year.
Based in Dallas of Texas, Exco carries out major operations in Texas, Louisiana and Appalachia. The firm’s largest producing region is East Texas/North Louisian region, which includes 97,800 net acres.
The acreage is primarily located in DeSoto and Caddo Parishes in Louisiana, as well Harrison, Panola, Shelby, San Augustine and Nacogdoches Counties in Texas.
In July 2013, Exco acquired assets in the South Texas region, including 120 producing wells and undeveloped acreage. The primary targets in the region comprised of Eagle Ford shale and Buda.