Midstates Petroleum To Sell Dequincy Area Assets In Gulf Coast For $90 Mln

(RTTNews) - Midstates Petroleum Company Inc. (MPO) said Monday that it has executed a Purchase and Sale Agreement or "PSA" for the sale of the Dequincy portion of its Gulf Coast assets in Louisiana.

The PSA includes Midstates' ownership interest in developed and undeveloped acreage totaling 12,816 gross acres in the Dequincy area in Beauregard and Calcasieu Parishes, Louisiana to a private buyer for total consideration of $90 million, subject to customary purchase price adjustments.

The transaction also includes the 20 mile El Grande pipeline in the area that Midstates constructed and owned 100%. The total consideration consists of $80 million in cash, a 10% overriding royalty interest in new wells drilled on that acreage (capped at $8 million) and future payments based on increased throughput on the El Grande pipeline (capped at $2 million).

During the third quarter 2014, the properties produced about 1,500 Boe per day. The transaction does not include Midstates' acreage and interests in the Fleetwood area of Louisiana.

The company said it will use the net proceeds from the sale to pay down outstanding borrowings under the Company's revolving credit facility.

The transaction is expected to close this November, subject to customary closing conditions.