Former Chesapeake CEO announces four deals in Australia covering 55 million acres
Even by
Aubrey McClendon’s outsized standards, American Energy Partners’ new acquisitions in Australia are big.
The chief executive of American Energy, a venture that acquires and develops oil and natural-gas properties, wrote an email Tuesday to his staff announcing four transactions involving three separate sellers. The deals cover a total of 55 million acres of oil and natural-gas properties in northern Australia’s McArthur Basin.
The sellers include a private company and two publicly traded concerns: Brisbane-based
Armour Energy Ltd. and Sydney-based
Empire Energy Group Ltd., Mr. McClendon wrote in the email, which was viewed by Dow Jones & Co. He didn’t identify the private-company seller.
“In this area, our exploration and development activities will target both unconventional and conventional plays,” wrote Mr. McClendon, adding American Energy is working on “a few other deals” that could bring its total holdings in the McArthur Basin to as many as 65 million acres.
At that size, American Energy’s Australian venture would be four times as large as Mr. McClendon originally planned. The Wall Street Journal reported in May that Mr. McClendon, the former chief of
Chesapeake Energy Corp., was raising capital to buy about 16 million acres of shale in the McArthur Basin.
According to Mr. McClendon, American Energy’s Australian holdings would be 1.5 times the size of Oklahoma and 2.5 times that of the Anadarko Basin.
Empire Energy Group said in an Aug. 21 statement that the deal with American Energy covers 14.6 million net acres of property. Empire’s subsidiary,
Imperial Oil & Gas Pty., would receive an upfront cash payment of $7.5 million and has the opportunity to receive another $7.5 million subject to production on the property meeting certain benchmarks.
During the first three years, American Energy will be the sole operator of wells drilled on the acres and would hold 100% of the working interest. After that, American Energy will own an 80% working interest and jointly operate the wells with Imperial.
Armour Energy said in an Aug. 20 release that the deal with American Energy covers 21.5 million acres of property. American Energy plans to make an $11 million upfront cash payment and spend $100 million over a maximum of five years in exchange for a 75% working interest.
Mr. McClendon formed American Energy in Oklahoma City in 2013 after being ousted as chief executive of Chesapeake.
The firm has made big bets on markets outside of the U.S. Earlier this month, American Energy said it has teamed up with Mexican private-equity firm EIM Capital to explore unconventional oil and gas in Mexico, tempted by opportunities presented by Mexico’s energy reform.
