Mach Natural Resources LP (NYSE: MNR) has made significant strides with the announcement of two transformative acquisitions in the Permian Basin and San Juan Basin. The combined consideration for both transactions is approximately $1.3 billion, and they are expected to close during the third quarter of 2025, with an effective date of April 1, 2025. These acquisitions are expected to be immediately accretive to cash available for distribution, representing a discount to PDP PV-10.
The acquisitions will substantially increase Mach's scale, with the production nearly doubling from 81 mboe/d to approximately 152 mboe/d. Additionally, the pro forma natural gas exposure will increase from 53% to 66%, and the total acreage will grow by 33% to 2.8 million acres.
The acquisitions will also diversify Mach's asset base across three prolific basins, including the Permian and San Juan Basins, complementing Mach’s existing mid-continent operations. Furthermore, the company's production portfolio will become more balanced, with approximately 55% exposure to the mid-continent and approximately 45% to the Permian and San Juan Basins.
Tom L. Ward, CEO of Mach, highlighted the transformative nature of these acquisitions, noting that they significantly enhance the company's scale and strategic positioning while maintaining a resilient balance sheet. Ward emphasized the immediate accretive nature of the transactions, underscoring the company's commitment to delivering long-term value to its unitholders.
The Permian Basin entry involves the acquisition of Sabinal’s assets for an unadjusted purchase price of $500 million, while the San Juan Basin entry entails the purchase of entities owning oil and gas assets managed by IKAV Energy Inc. for an unadjusted purchase price of $787 million.
Following these acquisitions, the pro forma Mach will operate across three distinct regions – the mid-continent, Permian, and San Juan Basins, with a diversified production base of approximately 152 mboe/d, in addition to a total of 2.8 million net acres to support development activity for the foreseeable future.
In terms of financing, Mach plans to fund the transactions through a combination of $762 million in Mach common units and $525 million from cash on hand and borrowings under its revolving credit facility. Additionally, the company expects its credit facility borrowing base and elected commitment to expand concurrently with closing.
These acquisitions mark a significant milestone for Mach Natural Resources LP, positioning the company for substantial growth and a more balanced production portfolio across multiple basins. Following these announcements, the company's shares moved 1.02%, and are now trading at a price of $14.85. Check out the company's full 8-K submission here.
