BAKKEN NEWS
Vitesse Energy Acquires 19,000 Net Acres In Williston Basin Vitesse Energy LLC has acquired non-operated oil and gas assets in the Williston Basin from EnerVest Operating LLC for a preliminary purchase price of $186.5 million. The assets include a working interest in approximately 600 wells and more than 19,000 net acres primarily in Williams, McKenzie and Mountrail counties. Vitesse Energy, a subsidiary of Leucadia National Corp., was founded last April and is located in Centennial, Colorado. EnerVest is one of the 25 largest oil and gas companies in the U.S., with more than 28,000 wells across 15 states, 4.8 million acres under lease and more than $9 billion in assets under management. Brian Cree, president and CFO of Vitesse, said that on average, the firm has a 4.5 percent working interest in the wells acquired from EnerVest.
INVESTMENT PROFILE: A drilling rig operates on a well site that Vitesse Energy has chosen for its Bakken investments. PHOTO: VITESSE ENERGY LLC
“Those assets are operated by premier operators in the Williston Basin,” he noted. “We differentiate ourselves by focusing on what we consider the core of the Bakken and Three Forks play rather than paying less for leases, acreage and assets on the outer edges of the play.” Cree described the Vitesse corporate strategy as acquiring assets in areas of the Bakken that offer the best economics, have the greatest amount of future drilling and provide the most upside from technological enhancements. “Our niche is to utilize our sizeable balance sheet to acquire core non-operated working interest ownership from both larger companies like EnerVest
and from smaller entities or individuals that need to raise capital or reduce their exposure to increased drilling,” he explained. Cree said the nature of the Bakken shale play minimizes the risk in acquiring oil and gas assets, but Vitesse takes that a step further by working with the top operators in the Bakken. “When you can buy in the core of the field and participate with the best operators, we believe that strategy will yield the best rates of return for Vitesse,” he said. Bob Gerrity, Vitesse Energy CEO, said, “This acquisition represents a synergistic addition to our existing high-quality acreage in the core area of the Bakken and Three Forks play, and
also provides new growth opportunities in developing areas of the field where technology continues to enhance returns,” Cree and Gerrity also manage Vitesse Oil LLC. Founded in August 2013, it is a Jefferies Capital-backed portfolio company. Both Vitesse firms are privately held companies that acquire non-operated working interest ownership in the Bakken to partner with operators. “We’ve been funded to the tune of $350 million, and it doesn’t necessarily have to stop there,” Cree said. “We’re going to try to find additional acquisitions that meet our investment parameters.”
California Refiner Will Expand With Bakken Crude Alon USA Energy Inc. is basing its crude flexibility project on Bakken crude. The Dallasbased independent refiner has been formulating a refinery expansion plan since October 2013 for its Bakersfield, California, refinery that would allow the facility to import Bakken crude. The facility was recently
approved for a rail and refinery upgrade project that will expand the facility’s railcar unloading and oil storage capacity along with other equipment upgrade modifications. Construction of the upgrades could be complete by the end of 2015, and will include the construction of a double-loop track capable of
handling two unit trains per day. The project will allow the facility to bring in 150,000 barrels of oil per day. The Bakken crude will be blended with other heavier crudes prior to refining. The facilities expansion marks the continued success of a refinery that went bankrupt in 2008 under previous ownership.
In 2011, the refinery was restarted and currently has a 70,000 bopd production capacity. “We are very pleased to receive the permit for our Bakersfield crude flexibility project and grateful for the community’s support of this initiative,” said Paul Eisman, CEO and president of Alon.
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