Midstates Petroleum Co. (NYSE: MPO) said April 4 it will sell Anadarko Basin properties for $58 million as the Tulsa, Okla.-based company aims to bring down costs.
An undisclosed company agreed to buy the properties located in the Texas panhandle and western Oklahoma. Midstates will retain the Northwest Stack undeveloped acreage in Dewey County, Okla.
“The sale of our Anadarko Basin properties aligns perfectly with our strategy to focus our activity, reduce costs, generate substantial free cash flow and improve liquidity for maximum optionality,” David Sambrooks, president and CEO of Midstates, said in a statement. “We are pleased to monetize these assets and generate significant cash to further strengthen our balance sheet, while retaining the upside optionality of our Northwest Stack position.”
Sambrooks added the company will continue to focus on improving margins and increasing operational efficiencies in its Mississippian Lime assets, in Woods and Alfalfa counties, Okla.
The divested properties produced about 3,900 barrels of oil equivalent per day net in fourth-quarter 2017 and had a proved developed PV-10 value of roughly $53 million at year-end 2017, according to the company release.
Midstates said proceeds from the sale will be used to pay down debt and for general corporate purposes upon closing, which is expected in second-quarter 2018.
In anticipation of the sale of these assets, Midstates completed a reduction-in-force in January to align its staffing levels with current activity, reducing adjusted cash G&A expense by $3 million to $5 million annually.
Midstates set an operational capex of $100 million to $120 million for 2018.
SunTrust Robinson Humphrey was adviser to Midstates on the divestiture. The transaction has an effective date of Jan. 1.
Recommended Reading
TotalEnergies 'Working on' Another Acquisition, Suriname FID- CEO
2024-07-26 - TotalEnergies expects to take a final investment decision on Suriname Block 58 in the second half of 2024 while searching for its next acquisition in Texas.
H&P’s $2B KCA Deutag Deal Positions Driller as Global Powerhouse
2024-07-25 - Helmerich & Payne’s acquisition of U.K. service company KCA Deutag will expand its international reach, particularly in the Middle East, as well as its onshore presence in the U.S.
Oxy Near $1B Deal to Sell Barilla Draw to Permian Resources— Sources
2024-07-25 - Occidental Petroleum and Permian Resources are in the process of finalizing the Permian Basin deal, which could be announced in the coming weeks if the talks don't fall apart, sources told Reuters.
Cash, Stock or Both? SilverBow Shareholders Choose Merger Consideration
2024-07-25 - Crescent Energy and SilverBow Resources, which are merging in a $2.1 billion deal, said that approximately $358.09 million in cash will be paid to holders of SilverBow common stock as part of the merger consideration.
Helmerich & Payne to Acquire KCA Deutag for $2B
2024-07-25 - H&P expects the acquisition of KCA Deutag to expand its international footprint, particularly in the Middle East, and enhance its global onshore drilling role.