Mach Natural Resources LP is looking to expand its footprint in the Anadarko Basin of Oklahoma with the $815 million purchase of about 62,000 net acres from private equity-backed Paloma Partners IV LLC.
Under the deal announced Monday, which is expected to close by the end of December, Oklahoma City-based Mach would acquire the acreage that spans across Canadian, Grady, McClain, Caddo, Custer, Dewey, Blaine and Kingfisher counties. Around 76% is located in the core development area in Canadian and Grady counties, according to Mach, which went public last month.
Also included in the asset package is recent production of about 32,000 boe/d, which is weighted 57% liquids and 23% oil. Proved developed producing (PDP) reserves of about 75 million boe, along with one rig currently running in Grady County, are also included. In addition, six additional wells are expected to be completed between Sept. 1, the effective date of the acquisition, and the Dec. 29 closing. Mach said the high-return drilling locations have more than 12 years of operated inventory on a one-rig program.
The Paloma acquisition is “underpinned by Mach strategy,” according to management. The deal is accretive to both total cash available for distribution, as well as expected cash distribution per unit. The executive team, led by CEO Tom Ward, indicated that there is “significant upside” beyond PDP.
The independent exploration and production company plans to fund the Paloma purchase with new debt financing. It has received fully committed financing from a group led by Chambers Energy Management and EOC Partners, and including Mercuria Investments US Inc., funds managed by Farallon Capital Management LLC and Macquarie Group, among others.
Kirkland & Ellis is serving as legal advisor for Mach. Vinson & Elkins is serving as legal advisor, and RBC Richardson Barr is serving as financial advisor for Paloma. Latham & Watkins is serving as legal advisor for the term loan participants.
Mach, which previously operated as BCE-Mach LLC before going public, has been focused on the acquisition, development and production of natural gas, natural gas liquids and oil in the Anadarko for years. In December 2022, it took on an additional working interest across 61 wells it operated in Kingfisher County and added 193 operated wells primarily located in Barber County, KS.
In September 2021, the company acquired assets primarily across Blaine, Custer and Dewey counties in Oklahoma that included about 4,400 net royalty acres.For its part, Paloma in 2021 took Houston-based Goodrich Petroleum Corp. private. In addition to its Oklahoma assets, Paloma also has resources in the Eagle Ford, Haynesville and Tuscaloosa Marine shales.
