Patina Oil & Gas Corporation has announced that it had agreed to acquire Bravo Natural Resources, a privately held oil and gas company based in Tulsa, for $119 million.
Bravo’s proved reserves are estimated at 133 Bcfe, of which 90% is natural gas. Net daily production currently approximates 15 MMcfe, comprised of 14 MMcf of gas and 170 barrels of oil.
The purchase, which is the second transaction announced by Patina in the past 30 days, will be funded with bank borrowings and is scheduled to close in early December.
The Bravo properties are primarily located in Hemphill county, Texas and Custer and Caddo counties of western Oklahoma. Bravo holds interests in 272 producing wells, of which it operates 119.
Bravo’s reserves are concentrated in Buffalo Wallow in the Texas Panhandle and Eakly-Weatherford in Oklahoma. Production in Buffalo Wallow is primarily from the Granite Wash formation at a depth of roughly 11,000 feet. Production at Eakly-Weatherford is from the Upper Skinner, Upper Red Fork and Morrow reservoirs between depths of 10,000 and 13,000 feet.
The Bravo properties are generally comprised of tight sand natural gas formations and should provide significant opportunities for Patina to apply its expertise in fracture stimulation.
Based on Patina’s engineering, only 30% of reserves currently classified as proved are on production and significant potential exists to prove up additional reserves through the large inventory of identified future drilling projects.
The acquisition includes more than 100 proven drilling locations. Over the next 24 months, a continuous development program should substantially increase production and confirm additional reserves.