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Aurora Oil & Gas completes Eagle Ford Shale acquisition in Texas

Last updated: 11:30 02 Apr 2013 AEDT, First published: 10:30 02 Apr 2013 AEDT

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Aurora Oil & Gas (ASX: AUT) has completed the acquisition of a 100% working interest in 2,700 net acres of Eagle Ford Shale acreage adjacent to its Sugarkane Field in Texas for US$117.5 million in cash.

The acquisition increases Aurora's net acreage in the Eagle Ford by over 14% to approximately 21,800 net acres and adds to its future net well inventory.

Notably for the company, the new operated position offers additional flexibility in capital allocation as well as production and reserves growth by allowing higher density well drilling.

Aurora had late last month said it expected to spud between 45-50 net wells this year, up between 25% and 30% from previous guidance.

Of these, 14-19 net wells will be spud on the new operated acreage, while the remaining wells will be on its non-operated acreage.

December 2013 average production is forecast to be 17,000 to 19,000 barrels of oil equivalent per day net to the company.

The assets, which consist of two blocks, had an average December 2012 production of 1,620 barrels of oil equivalent per day net of royalties from 11 wells and includes associated interests in field infrastructure and related assets.

This comprises 84% liquids, 70% oil, and represents a 12% increase to Aurora’s 2012 exit production.

It also adds about 6.7 million barrels of oil equivalent to Aurora’s Proved Reserves and 14MMboe to its Proved and Probable Reserves.

Aurora’s new blocks – Heard Ranch and Axle Tree - are located either adjacent to or very proximate to the Sugarkane Field, which is operated by Marathon Oil (NYSE: MRO).

The company’s working interests in the Sugarkane Field range from 36.4% to 9.1%.

Aurora had US$68 million in cash as of 31 December. It recently completed a US$300 million unsecured fixed coupon debt issuance and has an undrawn US$200 secured revolver facility, leaving it well funded for both its operated and non-operated drilling programs.

 

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