mississippian value to rfe, page-21

Update on eagle energy's sale of mississipian. Fron eagle energy's website.


Eagle Energy Company of Oklahoma will likely keep the assets it has for sale because high oil prices have made them more attractive to develop and sell down the road, or take the company public, CEO Steve Antry told this news service.

The package for sale consists of assets in the Mississippian Lime oil play with about USD 1.2bn in proved, probable and possible reserves, said Antry. A first round of bidding concluded in early April, and Eagle's financial advisor Scotia Waterous has been conducting a second round of bidding, he said.

Eagle is waiting on information from a second bidder before making a final determination on how to proceed, Antry said.

At the same time, Eagle Energy is now talking to potential IPO advisors, Antry said.

Based on high oil prices and the availability of capital for drilling, Eagle will likely drill another 50 to 100 wells in the coming 12 months and then consider an IPO or restart a sale process for the package, Antry said. He said the company would use Scotia again, adding that the firm did a tremendous job marketing the sale.

The company will fund a USD 50m to 100m drilling program from cash flow at current oil prices, its current USD 150m credit facility led by Societe Generale and some mezzanine funding, Antry said. The credit facility is redetermined based on the assets the company has proven, so that figure could increase as Eagle Energy continues to develop its holdings.

A year?s worth of drilling would give the company a total of 150 to 200 wells in Oklahoma and enough cash flow to be a worthy IPO candidate, Antry said.

Eagle Energy was established in December 2009 by New York-based energy private equity firm Riverstone, and subsequently began acquiring energy assets in the Mid-Continent region, this news service previously reported. Eagle and Riverstone had planned to look for new development opportunities after divesting the Mississippian assets, but again, high oil prices have made acquiring new assets less appealing than developing the ones the company currently controls, Antry said.

Chesapeake Energy, SandRidge Energy and Range Resources all operate in this area and could have been interested buyers, this news service previously reported.

Eagle Energy uses Hall Estill of Tulsa, Oklahoma, for its legal work.

by Chad Watt in Dallas, Texas