Black Ridge Signs $20.5 Million Deal For Williston Basin Producing Assets

Transaction Type
Sellers
Buyers
Announce Date
Post Date
Estimated Price
21MM
Description

To acquire certain producing oil and gas wells and development acreage in the Williston Basin.

Black Ridge Oil & Gas Inc. (OTC: ANFC) signed a definitive purchase and sale agreement with a private party to acquire certain producing oil and gas wells and development acreage in the Williston Basin for $20.5 million, the company announced Nov. 20.

Highlights:

  • Acquired net production of 165 barrel of oil equivalent per day (BOE/d), based on internal operating reports, representing a 53% increase over Black Ridge's third quarter average of 308 BOE/d;
  • Acquired proved reserves of 1.9 million barrel of oil equivalent (MMBOE) representing a 79% increase over the company's year-end 2012 proved reserves of 2.4 MMBOE;
  • Total PV10 of the acquired proved reserves equals $37.2 million with proved developed producing representing 34%, or $12.7 million, and
  • proved undeveloped reserves (PUD) of $24.5 million;
  • Properties currently operated by Burlington Resources Oil and Gas Co. LP, Marathon Oil Co. and Hunt Oil Co.;
  • Some 2,046 net acres acquired at an 87.5% net revenue interest;
  • 741 net acres located in northern Dunn County, N.D., are held by production; and
  • 1,305 net acres located in Golden Valley County, N.D., are currently undeveloped with lease expirations in 2019.

"This transaction demonstrates management's ability to utilize our platform to aggregate high return, quality assets in the heart of the Bakken/Three Forks development fairway to grow our drilling inventory, production and proved reserves in a meaningful way. While the immediate increase in production and cash flow are a benefit to the company, the real long term value of this acquisition is in the high return development projects and drilling inventory," Ken DeCubellis, Black Ridge CEO, said in the release.

Black Ridge will finance the acquisition with availability from the senior secured credit facility with Cadence Bank NA, the second lien credit facility with Chambers Energy Management LP, and cash on hand. In conjunction with the closing of the transaction, Cadence has agreed to increase the company's borrowing base from $7 million to $18 million. The Cadence borrowing base is subject to periodic redeterminations based on changes to the company's reserve base. The company expects the availability under both facilities to grow as it continues to acquire and develop new, high value leaseholds in the heart of the Bakken and Three Forks development fairway. As of Nov. 20, the company had not drawn from the Cadence facility and had an additional $10 million of availability under its Chambers facility.

Black Ridge Oil & Gas Inc. engages in the acquisition, exploration, development, and production of crude oil and natural gas properties primarily in North Dakota and Montana. The company is headquartered in Minnetonka, Minn.