Argent Energy Trust

Assets include the Manvel Field in Brazoria County, TX and the NE Davis, SW Mayville and Payne fields in southern Oklahoma contain 3.9 million barrels of oil equivalent (BOE).

The U.S. subsidiary of Argent Energy Trust plans to buy producing oil & gas properties in Texas and Oklahoma from an undisclosed seller for $132.5 million.

The acquired assets, which include the Manvel Field in Brazoria County, Texas and the NE Davis, SW Mayville and Payne fields in southern Oklahoma, are generally low decline oil properties covering about 4,030 net acres of land with estimated proved reserves of about 3.9 million barrels of oil equivalent (BOE). Proved plus probable reserves total 5.7 million BOE, 94% of which are oil.

Working interest before royalty production from the assets in June was about 890 BOE per day.

Argent made the purchase because it expects the deal will add significant oil production and proved reserves to its asset base. The acquisitions is also expected to strengthen Argent’s ongoing distributions. Argent plans to finance the acquisition from net proceeds of the offering, an advance of about $25 million from its credit facility and about $3.5 million from working capital.

Argent will operate over 97% of the assets, which have a proved plus probable Reserve Life Index of 17.5 years.
The acquisition is expected to increase Argent's oil weighting to 54% on a production basis and 50% on a total proved plus probable reserves basis. The transaction is also expected to increase Argent's ratio of proved reserves as a percentage of total proved plus probable reserves.

Argent's sustainability ratio, calculated as the sum of cash distributions and capital expenditures (net of escrow funds) divided by funds flow from operations, is expected to improve as a result of the purchase.