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Gulfport branches out from Utica with $1.85B Okla. lease purchase

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Gulfport branches out from Utica with $1.85B Okla. lease purchase

Gulfport Energy Corp. agreed to acquire about 85,000 net acres in the SCOOP and Springer plays from Quantum Energy Partners LLC's Vitruvian II Woodford LLC for $1.85 billion.

The deal would add SCOOP and Springer assets to Gulfport's "prolific" Utica core position, said President and CEO Michael Moore in a Dec. 14 statement. The $1.85 billion purchase price is made up of $1.35 billion in cash, to be funded using debt and equity financings, and about 18.8 million Gulfport shares issued to the sellers in a private placement.

The deal is scheduled to close in February 2017. Bank of America Merrill Lynch acted as exclusive financial adviser to Gulfport and Akin Gump Strauss Hauer & Feld LLP acted as legal counsel for the deal.

The acreage has multiple producing zones. It is composed of 46,400 Woodford acres and 38,600 Springer acres in Grady, Stephens and Garvin counties, Okla., according to the news release. The assets had about 183 MMcfe/d of existing production in October 2016.

The production areas range from liquids to dry gas. Gulfport said it identified about 1,750 gross drilling locations. Over 775 of these have about 75% internal rates of return. The deal also includes 48 producing horizontal wells and additional interest in more than 150 nonoperated horizontal wells, with four rigs in operation. Gulfport plans to maintain a four-rig cadence in 2017 and add two more rigs at the start of 2018.