Covey Park Energy Purchases Assets from Chesapeake in North Louisiana

Dallas-based Covey Park Energy on Feb. 15 said that it has closed on the acquisition of assets in the Haynesville shale area in North Louisiana. Covey purchased the assets from Chesapeake Exploration for $465 million.

Covey was able to complete the acquisition using additional equity investments from their existing investor, Denham Capital. The firm also received debt commitments from its core lender group in order to facilitate the purchase.

Covey is an independent oil and gas exploration company that was formed in 2013 with a focus on reserves within Arkansas, Louisiana and Texas. The firm has been purchasing assets in the Haynesville and Bossier regions for the last few months. In March 2016, Covey agreed to purchase all of EP Energy Corp. assets located in the Haynesville and Bossier shale regions for $420 million.

According to the company’s website, Covey “is currently one of the largest acreage holders and producers in the Haynesville/Bossier shales.” This latest move adds to the already existing assets the company owns in Louisiana.

The state saw a slight drop in activity as per the most recent rig count from Baker Hughes, which showed that Louisiana’s rig count dropped by three, bringing the state’s total to 51, while the nation as a whole saw an increase of 10 rigs for a total of 751.

Louisiana has also been in the news recently because of the proposed Bayou Bridge Pipeline expansion. A report from LSU Center for Energy Studies estimates that the construction of the pipeline will bring an $820 million economic benefit to the state, but opponents worry about the potential environmentally damaging effects of the pipeline.

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