MIDSTATES PETROLEUM COMPANY INC Midstates Petroleum Company, Inc. (NYSE: MPO) (the “Company”) announced today that it has executed an Exploration Agreement with PetroQuest Energy, Inc. (NYSE:PQ) under which PetroQuest acquired 50% of Midstates’ lease ownership rights in the Fleetwood area of Louisiana and a license to the associated Fleetwood 3-D seismic survey for total consideration of $24 million. The consideration to be paid by PetroQuest consists of $10 million in cash ($3 million now and $7 million in January 2015) and a credit of $14 million for Midstates’ share of future exploration activities including drilling, completion and lease acquisition costs. PetroQuest will be the operator and current plans are to drill two exploration wells during the second half of 2014 with additional exploration drilling in 2015.
Midstates acquired the Fleetwood 3-D seismic data in 2012 and, after reprocessing the data, has identified over 12 prospects and leads to date. Midstates estimates that the gross un-risked resource potential of the area, which includes approximately 30,000 acres under lease, exceeds 300 million barrels of oil equivalent.
Dr. Peter Hill, Interim President and CEO of Midstates commented, “We are very pleased to welcome PetroQuest as a partner and operator in the development of our Fleetwood area in central Louisiana. We have been excited about the organic growth opportunity this area possesses for quite some time but have been focusing our capital in our Midcontinent region. This arrangement with PetroQuest, a well-respected and experienced Louisiana operator, is an important next step in our effort to unlock the value we believe exists in the area and offers Midstates’ shareholders exposure to significant exploration upside at minimal to no capital cost.”
In conjunction with the Company’s entry into the exploration agreement, the Company has posted an updated investor presentation on its website, which can be found in the “Investors” section of the website at www.midstatespetroleum.com.
Other Information
Certain statements in this news release regarding future expectations and plans for future activities may be regarded as “forward looking statements” within the meaning of the Securities Litigation Reform Act. They are subject to various risks, such as financial market conditions, changes in commodities prices and costs of drilling and completion, operating hazards, drilling risks, and the inherent uncertainties in interpreting engineering data relating to underground accumulations of oil and gas, as well as other risks discussed in detail in the Company’s Annual Report on Form 10-K and other filings with the Securities and Exchange Commission. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct.
About Midstates Petroleum Company, Inc.
Midstates Petroleum Company, Inc. is an independent exploration and production company focused on the application of modern drilling and completion techniques in oil and liquids-rich basins in the onshore U.S. Midstates’ drilling and completion efforts are currently focused in the Mississippian Lime oil play in Oklahoma and Anadarko Basin in Texas and Oklahoma. The Company’s operations also include the upper Gulf Coast tertiary trend in central Louisiana. The Company is headquartered in Houston, Texas. Additional information about the Company is available at www.midstatespetroleum.com.
