Monday, March 1, 2010

Petrohawk Yard Sale: One Down, Three to Go!

As noted a couple of weeks ago, Petrohawk Energy is engaging in an asset divestiture to 1) focus like a laser on its core business areas and 2) raise capital to pay for this white-hot focus.  News comes today that the company has agreed to sell the first of four groups of assets, its producing assets in the WEHLU field in Oklahoma.

The sale to a private company of these assets with 23 Bcf of proved reserves producing 12 MMcfe/day will generate $155 million for Petrohawk.  If my math is right, at $10 million per well that should fund +/- 15 Haynesville wells.  Petrohawk assumes Haynesville recoveries of 7.5 Bcfe per Haynesville well, which implies 112.5 Bcfe (15 x 7.5 Bcfe).  I know that it's not a true apples-to-apples comparison, but on the surface it looks like a decent deal.

Petrohawk also closed the sale of some of the company's Mid-Continent assets with 7 Bcfe estimated proved reserves and 3 MMcfe/day production for $20 million.  In all of the transactions the buyer was not named.

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