Resolute completes shift to Delaware-only driller with Aneth sale
Resolute Energy has agreed to sell a unit that holds interests in Aneth Field for $195m to an affiliate of Elk Petroleum. Resolute will receive cash consideration of $160 million at closing and additional cash consideration of up to $35 million if oil prices exceed certain levels in the next three years. "This sale is the final step in our previously announced strategy to transform Resolute into a pure-play Delaware Basin company", said Resolute CEO Rick Betz.

Resolute Energy Corp. (NYSE: REN) entered into a definitive agreement to sell its subsidiary, which holds interests in Aneth Field, for total potential consideration of $195 million to an affiliate of Elk Petroleum Ltd, on Sept. 14.

UPDATE: Resolute’s Paradox Sale Creates Newest Delaware Basin Pure Play

Resolute will receive cash consideration of $160 million at closing and additional cash consideration of up to $35 million if oil prices exceed certain levels in the next three years.

The Aneth Field is located in the Paradox Basin of Southeastern Utah.

“This sale is the final step in our previously announced strategy to transform Resolute into a pure-play Delaware Basin company. Closing this transaction will significantly improve our cost structure, strengthen our balance sheet and position the company to accelerate the development of our prolific Delaware Basin property and continue our strong growth profile,” Rick Betz, Resolute’s CEO, said.

Resolute's current 2017 production guidance is 24,000 barrels of oil equivalent per day (boe/d) to 28,000 boe/d. Assuming the closing of the divestiture occurs by Nov. 1, its 2017 production will be reduced by about 1,000 boe/d.

As previously disclosed, actual July production was 23,600 boe/d in the Permian Basin and 29,500 boe/d for Resolute as a whole.

Under the terms of the definitive agreement, the buyer will fund a performance deposit of $10 million creditable against the purchase price.

Pursuant to the contingent consideration provisions of the agreement, the buyer will pay Resolute $40,000 for each day in the twelve months after closing that the WTI spot oil price exceeds $52.50 per barrel (up to $10 million), $50,000 for each day in the twelve months following the first anniversary of closing that the oil price exceeds $55.00 per barrel (up to $10 million) and $60,000 for each day in the twelve months following the second anniversary of closing that the oil price exceeds $60.00 per barrel (up to $15 million).

The transaction is expected to close in late October and become effective as of Oct. 1. The transaction is subject to customary covenants, closing conditions and purchase price adjustments.

Petrie Partners LLC and Barclays Capital Inc. (NYSE: BCS) acted as financial advisors to Resolute on the Aneth Field sale transaction. Resolute was represented by Arnold & Porter Kaye Scholer LLP.