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MLP Mach Natural Resources (MNR) units fell after announcing plans to sell more shares to finance $136 million in Midcontinent M&A.
Oklahoma City-based E&P Mach unveiled plans this week to sell 7.85 million common units to finance two pending acquisitions in Oklahoma and Kansas.
Investors reacted by sending Mach's unit price down, since the offering was first announced on Sept. 4, by 12.5%. MNR units fell more than 4% to close at $16.71 on Sept. 5.
Net proceeds from the offering are earmarked to fund two acquisitions of assets in Oklahoma’s Ardmore Basin and in the Anadarko Basin of western Kansas, according to Mach investor filings.
Mach is paying approximately $98 million for oil and gas assets in the Ardmore Basin of south-central Oklahoma. The Ardmore deal includes 3,590 net acres and 19 operated wells.
The company will also pay $38 million for assets in the Anadarko Basin of Oklahoma and western Kansas. The “Western Kansas” deal includes 128,788 net acres and 270 operated wells, filings show.
Total proved reserves for the combined assets to be acquired is 10.6 MMboe with a PV-10 value of $153.8 million.
Production from the combined assets averaged 4,347 boe/d (45% oil, 30% NGL, 25% gas), as of the six months ended Feb. 29.
Mach anticipates output from the acquired assets to average 5,220 boe/d (47% oil, 25% NGL, 28% gas).
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