Comprehensive Energy Data Intelligence
Information About Energy Companies, Their Assets, Market Deals, Industry Documents and More...
Riley Will Pay $330 MM to Acquire Assets in NM from Pecos Oil & Gas
03/15/2023
Oklahoma City-based Riley Exploration Permian Inc. is extending its presence in New Mexico through the acquisition of oil and gas assets from Pecos Oil & Gas LLC, valued at $330 million in cash, according to the company's announcement on February 28.
The deal adds 11,700 contiguous net acres in Eddy County, New Mexico, with current production of 4,200 bbl/d (7,200 boe/d) to Riley Permian’s portfolio.
Additionally, the transaction provides Riley Permian with more than 100 gross horizontal development drilling locations and 100% ownership of associated water-gathering and disposal infrastructure, including about 70 miles of water-gathering pipelines.
Riley Permian considers that under-developed assets with extensive development potential will allow generating value creation potential through the drillbit. The company also noted that the acquisition will improve the company's cost structure, facilitate normalizing development cadence, and potentially lead to oilfield service cost savings.
The Yeso Formation, where the purchased assets are situated, has geological similarities to Riley Permian's core asset in the San Andres formation in Yoakum County, Texas. The company also has acreage in Lea and Roosevelt counties, New Mexico.
Riley Permian anticipates drilling and completion costs in the Yeso Trend being lower overall for shallower, conventional source rock compared to deeper shale wells, allowing the New Mexico asset to compete on drilling economics with the company’s core asset.
The transaction is estimated at 3.4x 2023 adjusted EBITDAX and a 15% free cash flow (FCF) yield, accretive relative to Riley Permian’s 2023 stand-alone metrics. The company plans to finance the acquisition using borrowings under the company’s revolving credit facility and proceeds from issuing new senior debt. Riley Permian plans to issue $200 million of senior unsecured notes upon closing the deal, which is anticipated occurring during the second quarter of 2023.
The purchase is forecasted to raise Riley Permian’s adjusted EBITDAX by almost 50% and FCF by roughly 70% in 2023 while allowing the company to compete more effectively on drilling economics with its core asset. Riley Permian's fourth-quarter and full-year 2022 earnings will be released on March 8.
Riley Exploration Permian Inc. was formed to build a premier Permian Basin pure-play business. The company went public through a reverse merger with Tengasco Inc. in an all-stock deal in February 2021.
Riley Exploration Permian, a US-based oil and natural gas company, is dedicated to capital efficiency and steady growth of its reserves, production, and cash flow through the acquisition, exploration, and development of reserves primarily within the Permian Basin.
The company has significant contiguous acreage positions in Texas and New Mexico, with favorable reservoir and geological characteristics primarily for oil development. REPX's assets have the potential to produce significant recoverable reserves, offsetting legacy Permian Basin fields. Since the 1930s and 1940s, Wasson and Brahaney fields have produced over 2.1 billion and 108 million barrels of oil equivalent, respectively.
The company's drilling program in the Permian Basin consists of both horizontal and vertical wells, targeting multiple formations including the Wolfcamp, Spraberry, and Clearfork.
If you are looking for more information about energy companies, their assets, and energy deals, please, contact our sales office mapping@hartenergy.com, Tel. 619-349-4970 or SCHEDULE A DEMO to learn how Rextag can help you leverage energy data for your business.
Vital (Formerly Laredo) Expands in Midland, Purchases Acreage From Driftwood Energy
![$data['article']['post_image_alt']](https://images2.rextag.com/public/blog/132Blog_Vital_Expands_in_Midland_Purchases_Acreage_From_Driftwood_Energy.png)
Vital Energy Inc. has made a significant acquisition, purchasing 11,200 net acres in Upton and Reagan counties, Texas. The deal, which involved a combination of cash and stock, was worth almost $214 million. This move comes shortly after the company's rebranding from Laredo Petroleum just one month ago.
Targa Resources: $3.55 Billion Cash Transaction to Acquire Lucid Energy
![$data['article']['post_image_alt']](https://images2.rextag.com/public/blog/73Blog_Targa Resources to Pay $3.55 Billion Cash to Acquire Lucid Energy.png)
On June 16 Targa Resources Corp. decided to acquire Lucid Energy Group, located in the Permian Basin, which is a part of Riverstone Holdings LLC and Goldman Sachs Asset Management. Firstly, Targa enlarged due to the recent “blot-on” acquisition of Southcross Energy in the Eagle Ford for $200 million and it will become bigger thanks to the $3.55 billion cash transaction. Targa’s financial position allowed it to utilize convenient opportunities to extend its company so it bought #Lucid using available cash and debt with an estimated pro forma year-end 2022 leverage around 3.5 times. According to Targa’s estimates, the acquisition of Lucid will increase the number of natural gas pipelines by 1,050 miles and add about 1.4 Bcf/d of cryogenic natural gas processing capacity in service or under construction located mainly in Eddy and Lea counties of New Mexico. The investment-grade producers source approximately 70% of current system volumes. According to the press release, a full-year standalone adjusted EBITDA is expected to be between $2.675 billion and $2.775 billion and reported year-end leverage ratio of about 2.7 times. Targa’s updated financial expectations assume NGL composite prices average $1.05 per gallon, crude oil prices average $100/bbl, and Waha natural gas prices average $6 per MMBtu for the remainder of 2022.
![$data['article']['post_image_alt']](https://images2.rextag.com/public/blog/328_Blog_Why Are Oil Giants Backing Away from Green Energy Exxon Mobil, BP, Shell and more .jpg)
As world leaders gather at the COP29 climate summit, a surprising trend is emerging: some of the biggest oil companies are scaling back their renewable energy efforts. Why? The answer is simple—profits. Fossil fuels deliver higher returns than renewables, reshaping priorities across the energy industry.
![$data['article']['post_image_alt']](https://images2.rextag.com/public/blog/327_Blog_Oil Market Outlook A Year of Growth but Slower Than Before.jpg)
The global oil market is full of potential but also fraught with challenges. Demand and production are climbing to impressive levels, yet prices remain surprisingly low. What’s driving these mixed signals, and what role does the U.S. play?
![$data['article']['post_image_alt']](https://images2.rextag.com/public/blog/326_Blog_USA Estimated Annual Rail CO2 Emissions 2035.jpg)
Shell overturned a landmark court order demanding it cut emissions by nearly half. Is this a victory for Big Oil or just a delay in the climate accountability movement?