Mach Natural Resources LP signed an agreement with Paloma Partners IV, LLC, a privately-held Delaware limited liability company backed by EnCap Investments and its affiliated companies, to acquire certain interests in oil and gas properties, rights and related assets located in certain counties in Oklahoma for a total cash consideration of $815 million, subject to customary terms, conditions, and closing price adjustments.
The acquisition is expected to close December 29, 2023, with an effective date of September 1, 2023.
Asset highlights
- Recent production of approximately 32,000 Boepd (23% oil, 57% liquids)
- PDP reserves of approximately 31.5 million barrels of oil equivalent ("MMBoe")
- 1 rig currently running in Grady County with 6 additional wells expected to be completed between effective date and closing date
- Approximately 62,000 net acres in the Anadarko Basin in Canadian, Grady, McClain, Caddo, Custer, Dewey, Blaine and Kingfisher Counties, Oklahoma, approximately 76% located in the core development area in Canadian and Grady Counties
- High-return drilling locations with over 12 years of operated inventory on a 1 rig program
Acquisition Highlights
- Focus on distributions — Acquisition is accretive to both total cash available for distribution and expected cash distribution per unit
- Disciplined acquisition strategy — Acquiring PDP reserves and expansive SCOOP/STACK inventory at a discount to PDP PV10
- Maintain low leverage — Post transaction closing, Debt/EBITDA remains below 1.0x
- Reinvestment rate below 50% — Adding 1 rig on newly acquired assets in addition to our current 2 rig development program while remaining under 50% reinvestment rate
