Tom Ward-led firm acquires properties from Chesapeake
Oklahoma City-based BCE-Mach LLC has completed the purchase of oil and natural gas-producing properties in northwest Oklahoma’s Mississippi Lime formation, the company said.
BCE-Mach bought about 1,150 wells and 155,000 acres from Oklahoma City-based Chesapeake Energy Corp. Financial terms were not disclosed, but the company said the assets are producing about 11,000 barrels of oil per day and 143 million cubic feet of natural gas per day.
“This provides us a firm foundation on which to build a company,” CEO Tom Ward said.
Chesapeake in February said it agreed to three separate sales for Mississippi Lime assets. Chesapeake did not disclose details from the separate deals, but said it received a total of $500 million from the combined sale of 238,000 net acres and 3,000 producing wells.
This week’s announcement follows two weeks after Ward announced the creation of BCE-Mach, a partnership between his Mach Resources LLC and Houston-based Bayou City Energy. Ward previously co-founded Chesapeake, SandRidge Energy Inc. and Tapstone Energy.
This week’s purchase includes acreage in Woods and Alfalfa counties, an area Ward has concentrated on at various companies for much of the past decade.
“The Mississippi Lime in Woods and Alfalfa counties is a well-delineated play with an extensive inventory of future drilling locations,” Ward said in a statement. “On a fullcycle economics basis, this play competes with any in the Lower 48, and we are excited to join with a like-minded partner in Bayou City Energy focusing on projects with strong returns driven by stable cash flow. We will be an active developer of these properties from day one, led by a team of well-seasoned industry professionals with extensive experience in the area.”
The area also has been beset with operational and regulatory challenges in recent years because of the large amount of water the area produces along with oil and natural gas and because efforts to dispose of that water have been connected with the state’s ongoing but declining earthquake swarm.
“We’re very comfortable with the saltwater disposal system we inherited from Chesapeake,” BCE-Mach spokesman Greg Dewey said.
Executives said they created BCE-Mach to focus on acquiring, exploring and developing oil and natural gas assets throughout Oklahoma and Kansas.
“This acquisition is an excellent fit for the strategy set out for BCE-Mach and represents precisely the type of opportunity BCE targets for its platform company investments,” Will McMullen, Bayou City Energy’s managing partner, said in a statement this week.
“We are thrilled to be commencing this partnership in earnest with a great cash-flowing asset and have the utmost confidence in the Mach team’s ability to maximize value from this well understood and infrastructure-advantaged position.”