Earthstone Energy Inc. has acquired working interests in Eagle Ford assets it operates in southern Gonzales County, Texas, from four separate sellers for an aggregate purchase price of $48 million in cash.
The largest of the acquisition components, comprised of working interests owned by two affiliates of Titanium Exploration Partners LLC, constituted most of the total consideration.
Recent net production of the assets is about 1,150 boe/d (89% oil). The deals increase Earthstone’s working interest to 96% from 34%. The company expects a second-quarter 2021 production impact of 400 boe/d (89% oil) and a second-half 2021 production impact of 1,000 boe/d (89% oil).
The Eagle Ford acquisitions were unanimously approved by Earthstone's board. Because one of the four sellers is owned by an affiliate of EnCap Investments LP, a significant holder of Earthstone common stock and represented on the board, the audit committee independently reviewed and approved the related-party acquisition. After participating in a competitive sales process, the company acquired the assets for $8.2 million from that entity.