Silver Hill to Enter Bakken with Liberty Acquisition

Dallas-based Silver Hill Energy Partners, LP is acquiring the North Dakota oil and gas assets of Liberty Resources II, LLC, as well as a 100 percent interest in Liberty Midstream Solutions, LLC, a midstream oil and gas company with gas gathering, gas processing and produced water logistics assets in North Dakota.

The acquisition, expected to close on March 14, will provide PDP reserves of approximately 16 million barrels of oil equivalent, Silver Hill said in a recent news release. The financial details were not disclosed.

The assets had December 2023 net production of approximately 13,000 barrels of oil equivalent per day, consisting of 76 percent oil and 86 percent liquids. The acquisition covers over 300 gross operated drilling locations and 84,000 net acres in the Williston Basin Bakken and Three Forks play in Mountrail, Burke, Williams and Divide Counties, according to the release.

Silver Hill noted that there is one rig currently running in Mountrail County with 12 additional wells expected to be completed in the first quarter.

The acquisition also includes an integrated midstream system with approximately 33 miles of gas gathering lines, 22 miles of water gathering lines, a gas processing plant with a capacity of 30 million cubic feet per day (MMcfpd), five saltwater disposal wells with roughly 60,000 barrels per day of disposal capacity, 99,000 dedicated acres, and ample expansion capacity, the release said.

“After years of considering various opportunities for entry points into the Bakken, we are thrilled to be acquiring what we believe is an ideal initial upstream and midstream development platform for us in the play”, Silver Hill Founder and CEO Kyle Miller said. “Liberty’s assets represent not only an attractive operating footprint with immediate scale and runway but also a uniquely situated natural gas and water infrastructure system that provides a meaningful uplift to our drilling economics. We have enjoyed working with the Liberty team throughout this transaction and are excited to harness our teams’ combined knowledge and experience as we continue developing and growing this new Bakken position as well as our sizable existing Haynesville business”.

Silver Hill said it plans to fund the acquisition with a combination of equity from Silver Hill Energy Partners III, LP (SHEP III) and another Silver Hill-sponsored partnership as well as senior bank debt from each partnership’s credit facilities.

The partnership said it intends to use the transaction “as a springboard for future growth in the area through additional bolt-on acquisitions and related investments in upstream, midstream, minerals and royalties”.

SHEP III is Silver Hill’s third partnership and first institutional private equity fund with $1.02 billion of capital commitments from a diverse group of institutional partners. SHEP III describes itself as being focused on the direct acquisition and development of operated oil, natural gas and related infrastructure assets in premier basins across the onshore USA.

Following a successful sale of its South Texas upstream assets in April 2023, SHEP III’s current upstream portfolio resides entirely in the Haynesville and is composed of approximately 300 MMcfpd net of dry natural gas production from 151 producing wells and over 300 gross drilling locations across approximately 52,000 net acres.

Liberty Resources II is a Denver-based upstream operator focused on the acquisition and development of oil and gas assets. The company is led by members of the team of Liberty Resources LLC, a Riverstone Global Energy and Power Fund IV E&P company operating in the Bakken Shale of North Dakota.

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