Jack Vaughn sells his Powder River company for $86 million
In a continuing trend of Powder River Basin activity, Epsilon Energy announces a purchase agreement for Peak Exploration and Production along with its partners in the area, expecting to finalize the deal by the end of the 2025.
Peak E&P entered Powder River in 2012 and have had recent success after increasing their drilling activity despite halting their IPO. This venture into entering a developing unconventional play early and selling the established foothold follows Peak leader Jack Vaughn’s history of working in the Barnett, Bakken, and Granite Wash areas. He had previously sold his businesses in these regions to Forest Oil, XTO, Enerplus, and Kodiak Oil & Gas.
The addition of Peak’s Powder River assets will add 40,500 net acres and ~150% increase to Epsilon’s existing proved reserve assets in Marcellus (with Expand Energy), Permian (with several bolt-on acquisitions), the Barnett, and Western Canada Sedimentary basins. Epsilon’s CEO notes, “This is a key step forward for the company. We are acquiring a large under-exploited asset at an attractive price.” While their core business has been in Marcellus gas, they are looking to grow their oil projects in the Permian along with Peak’s 56% oil, 2.2 MBoepd portfolio. Epsilon continues to stay debt-free and the move into the oil world has only further strengthened their balance sheet.
Using TGS Well Data Analytics, we can see Peak’s position in the heart of the Powder River Basin amongst much larger companies. While not having quite the inventory or amount of time in the basin compared to the larger players, the Production and Type Curve plots show Peak E&P right in the middle of the pack regarding performance.
Figure 1. Peak E&P’s position in the Powder River Basin with production; economic statistics can be seen on the right.
Figure 2. Daily Oil Production
Figure 3. Daily Oil Type Curve comparing Peak E&P’s production to their peers.
Despite a previously forecasted downturn in oil production, there are operators continuing to build and manage their assets to maximize production in the short-term. This forward-looking plan may allow sustained cash flow, possibly offsetting the long-term expected decrease in global oil demand.
For more information about TGS Well Data Analytics or to schedule a demo, contact us at WDPSales@tgs.com.