Mach Natural Resources has finalized two acquisitions, valued at $1.3 billion, to acquire oil and gas assets from Sabinal Energy and IKAV Energy.
Mach Natural Resources LP, an independent upstream oil and gas company, announced today the successful completion of two transformative acquisitions, valued at approximately $1.3 billion. The transactions, which were previously announced, include the acquisition of oil and gas assets from Sabinal Energy, LLC and entities managed by IKAV Energy Inc. The move is designed to significantly enhance the company's scale and create a more diversified, multi-basin portfolio.
The acquisitions, which were a combination of cash and equity, were funded through a mix of borrowings under the company's credit facilities and the issuance of new common units. As part of the deal, Mach issued approximately 19 million common units to the sellers of the Sabinal assets and an additional 31 million units to the sellers of the IKAV San Juan assets. Following the closure of the transactions, the total number of common units outstanding for Mach Natural Resources is approximately 168 million.
The company's CEO, Tom L. Ward, commented on the significance of the transactions, stating, "Today marks an important step forward for Mach. With the successful completion of these two acquisitions, we have advanced our strategic pillars by nearly doubling production, establishing meaningful positions in the Permian and San Juan Basins, and creating a more balanced, multi-basin portfolio." This expansion complements Mach’s existing operations in the Anadarko Basin, giving the company a presence in three distinct and prolific oil and gas regions.
In a move to support its expanded operations and financial position, Mach also announced concurrent amendments to its credit facility. The company successfully upsized its revolving credit facility from $750 million to $1.0 billion and secured a new $450 million term loan. This has increased the company's total borrowing base from $750 million to $1.45 billion, providing significant financial flexibility for future development and growth initiatives.
The acquisition of the Sabinal and IKAV assets, which together add approximately 700,000 net acres, is expected to be immediately accretive to Mach's financial performance. With the addition of these assets, the company's total production is projected to nearly double, with a notable increase in natural gas exposure. The company's focus on shallow-decline, free-cash-flowing assets is expected to be reinforced by these acquisitions, which align with its long-term strategy of value creation and shareholder returns.
