TXO Partners has signed agreements to acquire oil and gas assets in the Greater Williston Basin, US, for combined total cash considerations of $243m and 2.5 million TXO common units.
The definitive separate agreements were signed with Eagle Mountain Energy Partners and an undisclosed private entity.
As part of the agreements, TXO Partners will acquire assets in the Elm Coulee field in Montana and the Russian Creek field in North Dakota.
Subject to satisfaction of standard closing conditions, the deals are due for completion in the third quarter of 2024.
Upon successful closure, the acquisitions are projected to augment TXO Partners’ daily production by approximately 4,500boe, with a liquids-rich profile of around 90%.
Additionally, the assets are expected to contribute Proved Developed reserves of nearly 17,000boe, as determined by independent petroleum consultants Cawley, Gillespie & Associates using SEC pricing.
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By GlobalDataTXO Energy Partners chairman and CEO Bob R Simpson said: “TXO uniquely operates as a production and distribution entity, which focuses on cash flow from our legacy assets. As significant owners, our leadership is focused, determined and disciplined.
“This acquisition in the Elm Coulee field represents the return to a region where our team previously had success. We expect the significant oil-in-place targets, with the application of our technology, to create equity value while delivering high returns.”
The legal counsel for TXO Partners in these transactions is Welborn Sullivan Meck & Tooley.
Eagle Mountain Energy Partners has engaged Jefferies as its financial advisor and O’Melveny & Myers as its counsel for the sale of its assets.
TXO Partners CFO and business operations president Brent Clum said: “We believe the combination of these two assets fits perfectly with our expertise and capital allocation strategy. These transactions provide the right blend of low decline rate, high margin and growth potential for TXO.
“We expect these assets to be accretive on every relevant measure, but most importantly to cash flow and distributions. It is a natural evolution to creating equity value.”
Currently, TXO has operations in the Permian Basin of West Texas and New Mexico, and the San Juan Basin of New Mexico and Colorado.
