Pennsylvania-based Mountaineer Keystone Energy closed its purchase of a 50 percent equity interests in PDC Mountaineer from PDC Energy for a total of $500 million.
PDC Mountaineer is a joint venture between Denver-based PDC Energy and Connecticut-based private equity firm Lime Rock Partners with holdings in the Marcellus shale play.
The purchase includes more than 131,000 net acres in the Marcellus play in West Virginia, with about 65 percent currently held by production.
Reserves at the assets are estimated at 480 billion cubic feet with current production at 48 million cubic feet per day of gas equivalent.
Mountaineer Keystone also purchased midstream assets held by PDC Mountaineer, including 24 miles of high-pressure gathering lines with over 100 million cubic feet per day of capacity.
MK Midstream Holdings, a joint venture that Mountaineer Keystone holds a 50 percent stake in, will manage the midstream assets.
The funds raised through the purchase process will provide Mountaineer Keystone with over $180 million of development capital to fully fund its operating plans including drilling over 400 wells and building out “significant” gathering and midstream assets.
Mountaineer Keystone is a portfolio company of Connecticut-based First Reserve, a private equity and infrastructure investment firm exclusively focused on energy.