Acquisition Anticipated to Add Over 470
Operated Producing Wells Across Approximately 140,000 Net Acres
with Expected Annualized Asset-Level Cash Flows of Approximately
$45 Million
Acacia Research Corporation (Nasdaq: ACTG) (“Acacia”) today
announced that its majority owned subsidiary, Benchmark Energy II,
LLC (together with its subsidiaries, “Benchmark”), has entered into
a Purchase and Sale Agreement (“PSA”) to acquire certain upstream
assets and related facilities (the “Assets”) in Texas and Oklahoma
from a private seller (such transaction, the “Acquisition”). The
Acquisition is anticipated to expand the Benchmark portfolio,
adding approximately 140,000 net acres and approximately 470
operated producing wells in the prolific Western Anadarko Basin
throughout the Texas Panhandle and Western Oklahoma.
Acquisition Highlights
- Expanded operated position throughout the core of the Western
Anadarko Basin with over 110,000 net acres, 100% of which is
held-by-production, with an additional 27,000 net acres in the
emerging Cherokee play
- Liquids-rich, low-decline, mature production base of
approximately 6,000 barrels of oil equivalent per day across
approximately 470 operated wells
- Significant opportunity set of field enhancement opportunities
including artificial lift optimization, workovers and
return-to-production projects
- Material exposure to the emerging Cherokee development play via
operated acreage and non-operated arrangements with best-in-class
operators
- Benchmark anticipates hedging a significant amount of
production
The Acquisition expands upon Acacia’s strategy within its
Benchmark subsidiary of driving returns through a focus on cash
flow. This is accomplished through acquiring predictable and
shallow decline, cash-flowing oil and gas properties whose value
can be enhanced via a disciplined, field optimization strategy,
with risk managed through robust commodity hedges and low
leverage.
Kirk Goehring, Benchmark’s Chief Executive Officer, commented:
“The acquisition of these assets represents a transformative moment
in Benchmark Energy’s history and an important next step in our
partnership with Acacia and McArron. This unique asset is expected
to deliver attractive, mature production with multiple drivers to
enhance value. After closing this acquisition, Benchmark will have
a large, contiguous acreage position in the heart of the
Mid-Continent, and incremental scale to continue driving meaningful
operational enhancements to create attractive returns for our
stakeholders for many years to come.”
MJ McNulty, Jr., Acacia’s Chief Executive Officer, added, “We
have always envisioned the Benchmark subsidiary as a platform,
partnering with its highly talented leadership team, to acquire
high-quality, cashflow-generating oil and gas assets. The Benchmark
team has an established track record for acquiring excellent assets
that possess attractive return profiles. This transaction is an
example of that strategy in action and a meaningful first step of
what we expect to be multiple acquisitions within the Benchmark
platform. We continue to believe there is an opportunity to acquire
outstanding assets at attractive valuations.”
Jonny Jones, McArron’s Chief Executive Officer, added, “This
transaction further expands the exciting partnership between Acacia
and McArron in our support of Benchmark. Kirk and his team have a
deep familiarity with these high-quality assets, and they will
bring Benchmark the required scale to drive meaningful value within
the combined enterprise.”
Enhancing Scale in the Anadarko Basin
The Acquisition includes an interest in approximately 470
operated wells producing approximately 6,000 net mboe/d in the core
of the Western Anadarko Basin, as well as a non-operated interest
in the undeveloped Cherokee play. The wells are mature, low-decline
production and will add significant diversification to Benchmark’s
production, with a balanced pro-forma portfolio of approximately
60% liquids and 40% natural gas. Further, the Assets’ proximity to
Benchmark’s existing operations in Texas creates further potential
to develop operational synergies of scale in the basin.
Additional Information
The transaction is expected to be funded utilizing cash from
Benchmark’s existing owners, Acacia and McArron Partners, as well
as committed debt financing from a group of local, regional banks.
Acacia’s share of the consideration is expected to be approximately
$57.5 million. Closing of the transaction, which is expected in the
second quarter of 2024, is subject to customary closing conditions
and termination rights.
Additional details about the acquisition are included in a Form
8-K filed by Acacia today with the Securities and Exchange
Commission.
About Acacia
Acacia is a publicly traded (Nasdaq: ACTG) company that is
focused on acquiring and operating attractive businesses across the
industrial, healthcare, energy, and mature technology sectors where
it believes it can leverage its expertise, significant capital
base, and deep industry relationships to drive value. Acacia
evaluates opportunities based on the attractiveness of the
underlying cash flows, without regard to a specific investment
horizon. Acacia operates its businesses based on three key
principles of people, process and performance and has built a
management team with demonstrated expertise in research,
transactions and execution, and operations and management.
Additional information about Acacia and its subsidiaries is
available at www.acaciaresearch.com.
About McArron Partners
McArron Partners is the investment arm of the Jones family of
Albany, Texas. McArron’s Chief Executive Officer is Jonny Jones,
founder of Jones Energy and former Chairman of the Texas Oil &
Gas Association and U.S. Oil & Gas Association. McArron deploys
its capital in a mix of global public and private investments. The
Jones family has supported energy entrepreneurs for more than five
decades.
About Benchmark
Benchmark is an independent oil and gas company engaged in the
acquisition, production and development of oil and gas assets in
mature resource plays in Texas and Oklahoma.
Safe Harbor Statement
This news release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended.
These statements are based upon Acacia’s current expectations and
speak only as of the date hereof. Words such as “anticipate,”
“believe,” “continue,” “could,” “estimate,” “expect,” “forecast,”
“future,” “guidance,” “intend,” “may,” “outlook,” “plan,”
“positioned,” “project,” “seek,” “should,” “target,” “will,”
“would,” or similar words may be used to identify forward-looking
statements; however, the absence of these words does not mean that
the statements are not forward-looking. While Acacia believes its
assumptions concerning future events are reasonable, a number of
factors could cause actual results to differ materially from those
projected, including, but not limited to: the ability of the
parties to consummate the Acquisition; delay or failure to
consummate the Acquisition due to unsatisfied closing conditions or
otherwise; significant transaction costs associated with the
Acquisition; the risk of litigation and/or regulatory actions
related to the Acquisition; the ultimate amount of cash
consideration to be paid in the Acquisition due to purchase price
adjustments or otherwise; changes in reserve or production levels;
conditions in the oil and gas industry, including supply/demand
levels for crude oil and condensate, Natural Gas Liquids and
natural gas and the resulting impact on price; changes in political
or economic conditions in the U.S. and elsewhere, including changes
in foreign currency exchange rates, interest rates, inflation rates
and global and domestic market conditions; actions taken by the
members of the Organization of the Petroleum Exporting Countries
(OPEC) and Russia affecting the production and pricing of crude oil
and other global and domestic political, economic or diplomatic
developments; capital available for exploration and development;
risks related to hedging activities; voluntary or involuntary
curtailments, delays or cancellations of certain drilling
activities; well production timing; liabilities or corrective
actions resulting from litigation, other proceedings and
investigations or alleged violations of law or permits; drilling
and operating risks; lack of, or disruption in, access to storage
capacity, pipelines or other transportation methods; availability
of drilling rigs, materials and labor, including the costs
associated therewith; difficulty in obtaining necessary approvals
and permits; the availability, cost, terms and timing of issuance
or execution of, competition for, and challenges to, mineral
licenses and leases and governmental and other permits and
rights-of-way, and our ability to retain mineral licenses and
leases; non-performance by third parties of contractual or legal
obligations, including due to bankruptcy; unexpected events that
may impact distributions from our equity method investees; changes
in our credit ratings; hazards such as weather conditions, a health
pandemic (similar to COVID-19), acts of war or terrorist acts and
the government or military response thereto; security threats,
including cybersecurity threats and disruptions to our business and
operations from breaches of our information technology systems, or
breaches of the information technology systems, facilities and
infrastructure of third parties with which we transact business;
changes in safety, health, environmental, tax and other
regulations, requirements or initiatives, including initiatives
addressing the impact of global climate change, air emissions, or
water management; impacts of the Inflation Reduction Act of 2022;
and unknown geological, operating and economic factors that could
cause actual results to differ materially from those anticipated or
implied in the forward-looking statements. For further discussions
of risks and uncertainties, you should refer to Acacia’s filings
with the Securities and Exchange Commission, including the “Risk
Factors” section of Acacia’s most recent Annual Report on Form 10-K
and any subsequent Quarterly Reports on Form 10-Q. Acacia
undertakes no obligation to update or revise any forward-looking
statements to reflect events or circumstances occurring after the
date of this news release, except as required by law. You are
cautioned not to place undue reliance on any forward-looking
statements, which speak only as of the date of this press release.
All forward-looking statements are qualified in their entirety by
this cautionary statement.
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version on businesswire.com: https://www.businesswire.com/news/home/20240220547241/en/
Investor Contact: FNK IR Rob Fink, 646-809-4048
rob@fnkir.com
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