Mid-Con Energy Partners LP (NASDAQ: MCEP) said Aug. 1 it bolted on acreage in the Permian Basin for about $19.5 million.
The Tulsa, Okla.-based company's subsidiary, Mid-Con Energy Properties LLC, entered a definitive agreement July 28 to acquire oil and natural gas properties in Nolan County, Texas. The seller wasn't disclosed.
The acquisition includes about 96% average working interest and operatorship in 41 wells. The properties are comprised of 27 producing, 11 injection and three inactive wells.
Average net daily production is 368 barrels of oil equivalent per day (boe/d), with about 96% oil, based on trailing three-month average ended June 30. Net proved reserves are about 1.5 MMboe, audited by Cawley, Gillespie and Associates Inc.
Reserves are about 57% proved developed producing and about 99% oil. The reserve-to-production ratio is about 11.2 years.
Mid-Con said it will fund the acquisition through private financing from investors including affiliates of Bonanza Capital, investor John Goff, and Swank Capital. The financing includes the sale of up to $25 million preferred units.
"The equity-weighted acquisition allows us to bolt-on multiple low operating cost, oil producing properties adjacent to our existing Permian position, while improving our overall debt metrics, collateral coverage, and financial flexibility," Jeff Olmstead, Mid-Con CEO, said in a statement.
The acquisition is expected to close by Aug. 12. The transaction's effective date is June 1.
Effective upon the closing, Mid-Con said it received unanimous lender support to increase the pro forma conforming borrowing base of its revolving credit facility to $140 million, subject to execution of an amendment to its credit agreement.
“Since announcing the results of our spring 2016 redetermination, we made a concerted effort to re-establish a conforming borrowing base without exclusively relying on a rebound in commodity price,” Olmstead added.
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