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TXO Partners (NYSE: TXO) announced on Tuesday that it was making a play in the Greater Williston Basin in Montana and North Dakota.
The Fort Worth oil and gas company has come to buy assets in the Elm Coulee field in Montana and the Russian Creek field in North Dakota from Eagle Mountain Energy Partners and a private company for $243 million and 2.5 million common units of TXO, subject to customary purchase price adjustments.
“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,” said Bob R. Simpson, TXO chairman and CEO, in a statement. “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 transactions are expected to close in the third quarter of 2024, according to a press release. Upon closing, the transactions are expected to add to TXO’s daily production approximately 4,500 barrels of oil equivalent with liquids-rich profile of around 90%.
The assets are also expected to contribute proved-developed reserves of nearly 17,000 barrels a day equivalent, as determined by independent petroleum consultants Cawley, Gillespie & Associates using SEC pricing.
TXO’s current acreage positions are concentrated in the Permian Basin of West Texas and New Mexico and the San Juan Basin of New Mexico and Colorado.
TXO’s counsel in connection with the acquisitions is Welborn Sullivan Meck & Tooley, P.C. EMEP’s financial advisor for the sale is Jefferies LLC and its counsel is O'Melveny & Myers LLP.
Eagle Mountain Energy Partners is a Pearl Energy Investments Portfolio Company.
“With an eye to a stronger future, we have diligently looked at many candidates in the last 17 months as a public company,” said Brent Clum, TXO president of Business Operations and CFO.
“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’s a natural evolution to creating equity value.”