SM Energy To Sell Non-operated Eagle Ford Assets To KKR Unit For $800 Mln

(RTTNews) - SM Energy Co. (SM) announced Tuesday that it has entered into a definitive agreement for the sale of its non-operated Eagle Ford assets for $800 million.

The company said it has signed the deal to sell third party operated assets in the Eagle Ford, including its ownership interest in related midstream assets, with a subsidiary of Venado Oil and Gas, LLC, an affiliate of KKR.

The transaction is expected to close in the first quarter of 2017, with an effective date of November 1, 2016. The purchase price will be subject to certain closing price adjustments.

The transaction is subject to the satisfaction of customary closing conditions, and there can be no assurance that the transaction will close on time or at all.

The assets expected to be sold include approximately 37,500 net acres in the Maverick Basin/Eagle Ford area of south Texas and a 12.5% interest in the Springfield Gathering System.

In the third quarter of 2016, these assets produced approximately 27,260 net Boe per day. President and Chief Executive Officer Jay Ottoson said, "This sale supports SM's strategy to be a premier operator of top tier assets. Our 2017 capital program will focus on our top tier oil position in the Midland Basin, consisting of approximately 87,600 net acres, and our top tier operated natural gas and NGL position in the Eagle Ford, consisting of approximately 161,500 net acres."

The company said the proceeds from the sale will provide additional flexibility to pursue aggressive growth from Midland Basin assets.

Scotia Waterous served as the Company's financial advisor in this transaction.