Seeking Alpha

EP Energy +2.8% as pair of deals tightens portfolio

  • EP Energy (EPE +2.8%) is higher after yesterday's pair of transactions that swapped legacy assets for bolt-on Permian acreage, potentially adding ~475 drilling locations.
  • EPE is buying Midland Basin producing properties and undeveloped acreage adjacent to existing operations, expanding its Wolfcamp position by ~25%, for $153M; it also is selling non-core assets in the Ark-La-Tex Cotton Valley and South Louisiana Wilcox areas for $150M.
  • Howard Weil upgrades shares to Sector Outperform from Sector Perform and raises its price target to $28 from $26, saying the conventional Ark-La-Tex assets were mostly gas and were not receiving capital, and EPE is maintaining the deeper Haynesville rights (Briefing.com).
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