TXO Partners, L.P. (NYSE:
TXO) ("TXO") announced that it has entered into separate purchase agreements with Eagle Mountain Energy Partners (A Pearl Energy Investments Portfolio Company) and a private company to purchase assets in the Elm Coulee field in Montana and the Russian Creek field in North Dakota for total cash considerations of $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," stated Bob R. Simpson, Chairman and CEO. "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."
"With an eye to a stronger future, we have diligently looked at many candidates in the last seventeen months as a public company. 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," commented Brent Clum, the President of Business Operations and CFO. "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."
Each of the transactions are expected to close in the third quarter of 2024, subject to satisfaction of customary closing conditions. If consummated,
the transactions are expected to add approximately 4,500 daily barrels of oil equivalent production (~90% liquids) and Proved Developed reserves of approximately 17,000 Mboe, as of April 1, 2024 as determined by Cawley, Gillespie & Associates using SEC pricing.
TXO Partners, L.P. (NYSE:
TXO) ("TXO") today announced the pricing of its public offering of 6,500,000 common units representing limited partner interests in TXO (the "common units") at price to the public of $20.00 per common unit. The offering size was increased from the previously announced offering size of 5,000,000 common units. TXO has granted the underwriters an option to purchase up to an additional 975,000 common units at the public offering price, less underwriting discounts and commissions. The offering is expected to close on June 28, 2024, subject to customary closing conditions.
TXO expects to receive net proceeds of approximately $122.5 million, after deducting underwriting discounts and commissions and estimated offering expenses and excluding any exercise of the underwriters' option to purchase additional common units. TXO intends to use the net proceeds from this offering, if consummated, to fund a portion of the cash consideration for the previously announced asset acquisitions from Eagle Mountain Energy Partners and a private company (the "Acquisitions"). The offering is not conditioned on the consummation of either of the Acquisitions. Pending the closing of the Acquisitions, and in the event that either of the Acquisitions are not completed, the proceeds from the offering will be used to repay the outstanding borrowings under TXO's revolving credit facility and for general partnership purposes.