Mach Natural Resources announces two acquisitions in Permian Basin for $1.3B

Mach Natural Resources (MNR) announced it has entered into two separate definitive agreements: one to acquire certain oil and gas assets from Sabinal Energy and another to acquire entities owning oil and gas assets managed by IKAV Energy. The combined consideration for both transactions is approximately $1.3B, subject to customary terms, conditions, and closing price adjustments. The transactions are expected to close during the third quarter, each with an effective date of April 1. Mach has agreed to acquire Sabinal’s assets for an unadjusted purchase price of $500M, subject to customary terms, conditions, and closing adjustments. Mach expects to fund the transaction with Sabinal with $300M of equity consideration in the form of Mach common units, with the balance to be funded through a combination of cash on hand and borrowings under its revolving credit facility. The acquired Sabinal assets include approximately 130,000 net acres. First quarter average production was approximately 11 Mboe/d, of which 98% was liquids, 2% was natural gas. Mach has agreed to purchase IKAV San Juan for an unadjusted purchase price of $787M, subject to customary terms, conditions, and closing adjustments. Mach expects to fund the transaction with IKAV San Juan with $462M of equity consideration in the form of Mach common units, with the balance to be funded through a combination of cash on hand and borrowings under its revolving credit facility. IKAV San Juan’s assets include approximately 570,000 net acres. First quarter average production was approximately 60 Mboe/d, of which 6% liquids, 94% was natural gas. Pro forma Mach will operate across three distinct regions – the Mid-Continent, Permian and San Juan basins. The combined company will have a diversified production base of approximately 152 Mboe/d2, in addition to a total of 2.8M net acres which will support development activity for the foreseeable future. The standalone Mach figures below represent actual reported results for the three-month period ended March 31. Figures for Sabinal and IKAV San Juan represent actual results for the three-month period ended March 31. Details regarding the transactions’ impact to Mach’s capital and volume guidance will be provided after closing. Total consideration for the transactions is $1.3B, subject to customary terms, conditions, and closing price adjustments. Mach plans to fund the transactions through an aggregate combination of $762M in Mach common units and $525M from cash on hand and borrowings under its revolving credit facility. Concurrently with closing, Mach expects its credit facility borrowing base and elected commitment will expand.