Silver Hill Energy Partners LP is entering the Bakken play through the acquisition of Liberty Resources II.
Dallas-based Silver Hill agreed to acquire Denver-based Liberty’s interests in oil and gas properties, rights and related assets in North Dakota, the companies announced Jan. 31.
Net production from the acquired assets averaged around 13,000 boe/d (76% oil, 86% liquids) in December and its proved developed producing reserves total approximately 16 MMBoe.
Liberty has 84,000 net acres across Mountrail, Burke, Williams and Divide counties, North Dakota.
Liberty currently has one rig drilling in Mountrail County, and the company expects to complete 12 additional wells during the first quarter. The acquired assets include more than 300 gross operated drilling locations.
Silver Hill will also assume 100% ownership of Liberty Midstream Solutions LLC, which owns gas gathering, gas processing and produced water logistics assets in North Dakota.
The midstream assets include 33 miles of gas gathering lines, 22 miles of water gathering lines, a 33 MMcf/d gas processing facility and five saltwater disposal wells with about 60,000 bbl/d of disposal capacity.
“After years of considering various opportunities for entry points into the Bakken, we are thrilled to be acquiring what we believe is an ideal initial upstream and midstream development platform for us in the play,” said Kyle D. Miller, founder and CEO of Silver Hill, in a news release.
The transaction is expected to close March 14. Financial terms of the acquisition were not disclosed.
Silver Hill plans to finance the acquisition through a combination of debt and equity. Equity consideration will come from Silver Hill Energy Partners III LP—Silver Hill’s third partnership and first institutional private equity fund—as well as from another Silver Hill-sponsored partnership.
Silver Hill Energy Partners III LP closed in 2022 with $1.02 billion in capital commitments.
Senior bank debt from each partnership’s credit facilities will also finance the Liberty acquisition, Silver Hill said.
Silver Hill said it plans to use the Liberty acquisition in the Bakken “as a springboard for future growth in the area through additional bolt-on acquisitions and related investments in upstream, midstream, minerals and royalties.”
Silver Hill III was formed following the successful merger of Silver Hill I and II’s upstream assets into RSP Permian in 2017 for $2.5 billion in cash and stock. RSP Permian later sold to Concho Resources, which was later acquired by ConocoPhillips Co. in a $13.3 billion transaction in early 2021.
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