Elk Petroleum - Operator of Aneth CO2 EOR project
Elk Petroleum is to acquire a 63% operated interest in the Aneth Rocky Mountain CO2 EOR project, transforming the company into one of the largest producers on the ASX. Management forecasts 2018 net production of 11,000boe/d. At US$160m, the deal is priced at a material discount to management’s estimates of 1P (NPV10) at US$288m, with the consideration to be funded through a combination of new equity and debt. An equity placement to raise A$27.5m was priced at A$0.062 (a 22% discount to last close and 10% below the six-month trading average), with the balance funded through a US$98m debt facility from Riverstone Credit Partners and institutional lenders and up to US$55m in preferred equity provided by the AB Energy Opportunity Fund.Elk Petroleum is engaged in developing enhanced oil recovery (EOR) projects. Co.'s activities consist of the development of a CO2 EOR project at the Grieve oil field in Wyoming, U.S., continuation of operations at the Singleton Unit in Nebraska for future implementation of an EOR project, and via its acquisition of the Singleton South oil field in Nebraska, the development of potential by-passed oil pool on the southern flank of the Singleton Unit. Co. has two operating segments: Australia, which comprises the corporate head office function; and the U.S., which comprises administration, production, exploration, evaluation and development of oil and gas fields and ownership of pipelines.
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