Adobe Stock AI
Fort Worth-based U.S. Energy Development Corporation has made the largest acquisition in its 45-year history, buying roughly 20,000 acres in West Texas to boost its oil and gas operations in the oil-rich Permian Basin.
The land is in Reeves and Ward counties. The deal gives the company access to land that already has active oil and gas wells, plus room for years of future drilling.
"This transaction greatly enhances the overall quality and resilience of our portfolio, supplementing our reserves with additional proved producing assets, adding years of multi-bench drilling inventory, and expanding our operated economies of scale," said Jordan Jayson, CEO and chairman of USEDC, in a statement. "These factors position USEDC for sustained, efficient growth and reinforce our commitment to delivering long-term value for our partners."
At the same time as the acquisition, U.S. Energy Development Corporation also increased its available credit from $165 million to $300 million. The credit line, led by Citibank, could grow to as much as $500 million in the future.
“This expanded credit shows that our lenders believe in what we’re doing and gives us more flexibility to grow,” said Brandon Standifird, the company’s CFO. “With this support, we’re in a strong position to keep expanding strategically.”
Citibank led the financing syndicate, with TCBI Securities, Inc., U.S. Bank National Association, Washington Federal Bank, and KeyBank as joint lead arrangers and bookrunners. Sidley Austin served as legal counsel to USEDC on its credit facility.
Company officials say the purchase strengthens their overall position in the region by adding to both current production and long-term growth plans. The company also plans to launch a dedicated drilling rig on the new acreage this year.
The acquisition is a major step in U.S. Energy’s plan to invest up to $1 billion in oil and gas projects in 2025. Last year, the company invested around $850 million in similar projects.
The deal was advised by RBC Richards Barr and the law firm Willkie Farr & Gallagher LLP.
Founded in 1980, USEDC is a privately held exploration and production firm that manages assets for itself and its partners. It has invested in, operated, and/or drilled approximately 4,000 wells in 13 states and Canada and has deployed more than $3 billion on behalf of itself and its partners.