TXO Partners secures key oil and gas assets for $243m in Montana and North Dakota

In a strategic expansion of its portfolio, TXO Partners, L.P. (NYSE: TXO) has inked agreements to acquire significant oil and gas assets in the Elm Coulee field in Montana and the Russian Creek field in North Dakota. The deal, valued at $243 million plus 2.5 million common units of TXO, was finalized with Eagle Mountain Energy Partners and a private company, marking a major step in TXO’s growth strategy. These acquisitions are poised to enhance TXO’s production capabilities and financial metrics, particularly focusing on cash flow and distribution improvements.

TXO, under the leadership of Chairman and CEO Bob R. Simpson, emphasizes a disciplined approach, leveraging its production and distribution operations to optimize cash flows from legacy assets. “This acquisition represents a return to a region where our team has previously succeeded,” Simpson noted, highlighting the potential of these assets to boost equity value through advanced technological applications.

Brent Clum, President of Business Operations and CFO at TXO, elaborated on the acquisition’s fit with TXO’s strategic goals, pointing out the assets’ low decline rates and high margins. “We expect these assets to be accretive on every relevant measure, particularly cash flow and distributions,” Clum stated, underscoring the natural progression towards creating significant equity value for stakeholders.

Scheduled for closure in the third quarter of 2024, these transactions are subject to customary closing conditions. Post-acquisition, TXO anticipates an addition of approximately 4,500 daily barrels of oil equivalent production, with a composition of roughly 90% liquids. Furthermore, the Proved Developed reserves are set to increase by about 17,000 Mboe, as appraised by Cawley, Gillespie & Associates based on SEC pricing guidelines as of April 1, 2024.

In facilitating these acquisitions, TXO has engaged Welborn Sullivan Meck & Tooley, P.C. as its legal counsel. Eagle Mountain Energy Partners received financial advisement from Jefferies LLC and legal guidance from O’Melveny & Myers LLP.

TXO Partners, L.P., known for its strategic acquisitions and optimization of conventional energy resources in North America, maintains substantial positions in the Permian Basin and the San Juan Basin, underlining its commitment to leveraging established assets to deliver robust operational and financial results.

The strategic acquisitions by TXO Partners represent a well-calculated move to bolster their production capabilities and financial stability. By focusing on assets with a high potential for integration and growth, TXO not only ensures a smooth continuation of its operational excellence but also strengthens its market position amid fluctuating economic and energy landscapes.