Elk Petroleum completes buyout of US oil field for $205m

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Australian oil company Elk Petroleum has completed its acquisition of the Greater Aneth oil field from US company Resolute Energy for $US160 million ($205 million).

The purchase of the low-decline, high value oil field — the 86th largest in the US — transfers a majority ownership of 63 per cent to Elk, making the company one of the largest listed oil producers on the ASX with an ability to double production to over 14,000 barrels of oil per day.

Elk has referred to the oil field as one of the most significant enhanced oil recovery (EOR) projects in the US, and the purchase is in line with the company’s modus operandi of mature field EOR conversion.

“Elk is excited by the opportunities for its expansion,” said Elk managing director, Bradley Lingo.

“We have undertaken due diligence, built a strong business case and established a seamless plan for integration, including the adoption of over 90 highly experienced Resolute staff across all areas of Aneth field operation and head office management.”

Elk has funded the purchase via $27.5 million in ordinary shares, $US98 million loan from three companies (HPS Investment Partners, Riverstone Credit Partners and AB Energy Opportunity Fund) and $US65 million.

Development at Aneth has slowed over the past few years as Resolute has concentrated its efforts on its interests in the Permian Basin in Texas.

As part of the transition, James Piccone, president and founding director of Resolute, will be joining Elk as its USA chief executive officer.