TXO Partners is acquiring assets in the Williston Basin (pictured) for $243 million in cash and 2.5 million TXO shares. (Source: Shutterstock.com/TXO Partners)
TXO Partners LP, led by former XTO Energy executive Bob Simpson, is entering the Williston Basin through acquisition.
Fort Worth-based TXO Partners announced two separate Williston transactions after markets closed June 25—one with Eagle Mountain Energy Partners, a portfolio company of private equity firm Pearl Energy Investments, and the other with a private seller.
The deals will deliver to TXO assets in the Elm Coulee field of Montana and the Russian Creek field of North Dakota.
“This acquisition in the Elm Coulee field represents the return to a region where our team previously had success,” said Simpson, chairman and CEO of TXO Partners. “We expect the significant oil-in-place targets, with the application of our technology, to create equity value while delivering high returns."
Simpson, a shale industry veteran, previously founded Cross Timbers Oil, later named XTO Energy Inc., which sold to Exxon Mobil Corp. in 2010 for $41 billion.
XTO developed a large footprint across the Williston Basin, and the company has retained acreage in the area under the ownership of Exxon Mobil.
And Montana’s Elm Coulee field is inscribed in the annals of shale history itself as one of the original horizontal fracking plays in the Lower 48.
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For TXO Partners, which went public last January, the acquired Williston Basin assets represent the “right blend of low decline rate, high margin and growth potential,” said Brent Clum, CFO and president of business operations.
The acquisitions will add approximately 4,500 boe/d (90% liquids) and proved developed reserves of approximately 17 MMboe.
“With an eye to a stronger future, we have diligently looked at many candidates in the last seventeen months as a public company,” Clum said. “We believe the combination of these two assets fits perfectly with our expertise and capital allocation strategy.”
As consideration, TXO will pay $243 million in cash and issue 2.5 million TXO common units. Based on TXO’s June 25 closing price of $21.82/share, the equity consideration would imply a value of approximately $54.55 million.
Both transactions are expected to close in the third quarter.
TXO was represented by Welborn Sullivan Meck & Tooley PC as counsel on the transactions. Eagle Mountain Energy Partners was represented by O'Melveny & Myers LLP as counsel and Jefferies LLC as financial adviser.
TXO reported total sales volumes of 22,000 boe/d in its first-quarter earnings.
Before the Williston acquisition, TXO’s operations were primarily focused on the Permian Basin and the San Juan Basin of New Mexico and Colorado.
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