Kalnin Ventures becomes leading player in the Marcellus with $210-million acquisition


HOUSTON -- Kalnin Ventures LLC has announced that an affiliate of its BKV Oil and Gas Capital Partners, LP fund, has entered into purchase and sale agreements with respect to the Fund’s fifth acquisition of assets in just over two years in the northeast portion of the Marcellus shale. The Fund is financially backed by its sole investor, Banpu Pcl, a Thailand-based coal mining and power generation company with total assets of more than $6 billion.

The transaction is valued at an aggregate price of $210 million, with potential additional payments to the sellers of up to $18.75 million over the next three years, depending on natural gas prices. Separate purchase and sale agreements were entered into with Carrizo (Marcellus) LLC and Reliance Marcellus II, LLC, to acquire their respective interests in the assets (subject to customary closing conditions), which are comprised of interests in 112 wells, including 98 producing wells, 11 drilled and uncompleted (DUC) wells and three wells that are temporarily abandoned.

The assets, which are predominantly located in Pennsylvania’s Wyoming and Susquehanna Counties, will generate cash flows for the Fund immediately and fit within Kalnin's strategy of acquiring profitable, low-risk assets that provide strong cash flow yields.

With its fifth transaction in just over two years, Kalnin has invested, through the Fund, $417 million in the Marcellus shale and is poised to fully invest its first fund as it continues to expand and diversify its strategy of acquiring, managing, and monetizing portfolios. With this acquisition, the Fund is now one of the top 20 natural gas producers in Pennsylvania, and Kalnin has an eye toward continued future growth.

“This deal is unique from our previous four in that it provides us the opportunity to naturally expand into an operator position while also acquiring additional midstream assets,” said Christopher Kalnin, managing director and Co-founder of Kalnin Ventures LLC. “However, it is similar to prior deals in that we are acquiring profitable assets and enhancing them with technology and big data. Our experience as a non-operator, and now operator, coupled with our high-quality asset base and proprietary technology, has put us in a compelling position to expand further in the super core of the Marcellus.”

The acquisition follows the Fund's previous transactions with Zena Energy LLC, Radler 2000 LP - Tug Hill Marcellus, LLC; Chief Exploration and Development LLC; and Range Resources - Appalachia, LLC, all located in the productive Marcellus shale.

Upon completion of this transaction, the Fund will have an interest in 355 active wells. These transactions provide the Fund with net natural gas production of 160 MMcfd.

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