DALLAS – Peregrine Energy Partners has agreed to acquire producing royalty interests in Washington County, PA as well as in Tyler and Ritchie counties, in West Virginia, from various undisclosed sellers, according to a news release.
These acquisitions include production from numerous producing natural gas wells under Range Resources (RRC), Antero Resources (AR) and EQT Corporation (EQT), all pure-play operators dedicated to the Appalachian Basin where they collectively operate over 9,500 wells on 2,500,000 gross acres across 3 states, the release said.
“The Appalachian Basin and specifically the Marcellus Shale is an area we’ve been a fan of for many years as it’s proven itself a consistent source of high-quality, natural gas assets operated by basin-specific operators like EQT, Range, and Antero,” said Peregrine Co-Founder Wolf Hanschen. “When you have these geographically-dedicated operators spending north of $2 billion this year alone, it gives us the confidence to lean in on properties like these, even with all of the current unknowns in the broader markets,” commented Hanschen.
Although oil prices have seen a marked rebound in the last 30 days, Peregrine continues to focus its buying efforts on natural gas production as that market has been much less severely impacted by the demand destruction of COVID-19 and supply shock caused by international price wars in the oil sector, Peregrine’s release said.
“While we’d fundamentally love to acquire oil assets right now, the buy-sell gap has just been too much to overcome in most instances,” noted CJ Tibbs, Peregrine’s Co-Founder. “Because we buy based off of current cash flow numbers,” Tibbs continued, “It can be hard to agree on what the future royalty revenue will look like when you’ve had this much volatility within the oil market in the last few months.”
Peregrine Energy Partners, with offices in Dallas and Denver, are private purchasers of oil and natural gas royalties.