After recently going public, Mach Natural Resources is growing its position in the Anadarko Basin with an $815 million acquisition.
Oklahoma City-based Mach Natural Resources LP is acquiring oil and gas properties, rights and assets in Oklahoma from Paloma Partners IV LLC, an upstream company backed by private equity firm EnCap Investments.
Total cash consideration for the transaction is $815 million, subject to closing price adjustments. The deal is expected to close Dec. 29, with an effective date of Sept. 1.
Mach’s latest acquisition comes just over two weeks after the Midcontinent E&P listed its shares on the New York Stock Exchange.
The acquisition from Paloma will add approximately 62,000 net acres spanning across Canadian, Grady, McClain, Caddo, Custer, Dewey, Blaine and Kingfisher counties, Oklahoma, Mach announced Nov. 13. More than 75% of the newly acquired acreage falls within Mach’s core development area in Canadian and Grady counties.
The acquired assets include recent production of about 32,000 boe/d (23% oil, 57% liquids), as well as proved reserves of approximately 75 MMboe.
RELATED
MLP Mach Resources’ IPO Gets Off to Solid Start
There is currently one rig running on Paloma’s acreage in Grady County; six wells are expected to be completed between the effective and closing dates, Mach said.
Mach plans to fund the acquisition with new debt financing. The company has secured $825 million in senior secured financing from a group led by Chambers Energy Management and EOC Partners; Mercuria Investments US Inc., Macquarie Group and funds managed by Farallon Capital Management LLC are also participating in financing the loan.
Mach expects that its debt-to-EBITDA ratio will remain below 1.0x after closing the deal.
Mach is led by Tom Ward, an oil and gas industry veteran who previously co-founded Chesapeake Energy Corp., SandRidge Energy and Tapstone Energy.
Chesapeake and SandRidge are both publicly traded E&Ps; Tapstone was acquired by Diversified Energy for $419 million in 2021.
The newly public MLP Mach, similar to other MLPs, is set up to distribute all available cash to unitholders each quarter after costs and expenses. The company said the Paloma acquisition will be accretive to both total cash available for distribution and expected cash distribution per unit.
Kirkland & Ellis is serving as legal advisor for Mach. Vinson & Elkins is serving as legal adviser and RBC Richardson Barr is serving as financial adviser for the sellers. Latham & Watkins serves as legal adviser for the term loan participants.
RELATED
Former Chesapeake, SandRidge Exec Plans IPO for Anadarko E&P
Recommended Reading
US to Close Northeast Gasoline Reserve with 1 MMbbl Sale
2024-05-21 - The Biden administration will sell nearly 1 MMbbl of gasoline in the U.S. managed stockpile in northeastern states as required by law, the Department of Energy said on May 21, effectively closing the reserve.
WildFire Energy I Buys Apache’s Eagle Ford, Austin Chalk Assets
2024-05-21 - Private producer WildFire Energy I, backed by Warburg Pincus and Kayne Anderson, scooped up Apache’s portfolio in the eastern Eagle Ford and Austin Chalk plays.
Phillips 66 to Acquire Pinnacle Midstream for $550MM
2024-05-21 - Phillips 66 said the deal to acquire Pinnacle Midstream was a strategic move to expand its natural gas gathering and processing assets in the Midland Basin.
Supreme Court Passes on MVP Appeal Challenging FERC’s Authority
2024-05-21 - The Supreme Court declined to take up a lawsuit against the Mountain Valley Pipeline, the latest in a series of legal maneuverings over a case filed by opponents of the pipeline.
Kimbell Royalty's Board Member Ben Fortson Passes Away
2024-05-21 - Ben Fortson had more than 60 years of experience in the oil and gas industry and was with Kimbell Royalty Partners from its IPO in 2017 into 2024.