The US District Court for the Southern District of Texas has given its approval for the sale of Texas-based oil and gas company Alta Mesa Resources and its subsidiaries to BCE-Mach III for $220m.
Originally, in January 2020, BCE-Mach III signed a deal to acquire all the upstream assets of Alta Mesa Resources and other subsidiaries in addition to the company’s midstream subsidiary Kingfisher Midstream for a total sum of $320m.
However, due to multiple factors, including the coronavirus outbreak and the reduced demand for oil made the company to settle to a lesser consideration.
BCE-Mach III is the third partnership between Bayou City Energy Management, an upstream-focused energy private equity firm, and Mach Resources, an Oklahoma-based oil and natural gas producer.
Alta Mesa Resources is a pure-play stack operator with a focus on the eastern portion of the Anadarko Basin. Previously known as Silver Run Acquisition II, the company was formed in 2018 by combining the core upstream assets of Alta Mesa with the gas processing assets of Kingfisher Midstream.
In September 2019, the company filed a voluntary petition under Chapter 11 of the US Bankruptcy Code citing the challenging commodity price environment, while claiming that the capital market is highly constrained for energy companies.
What BCE-Mach III gains from the acquisition of Alta Mesa Resources
Through the acquisition of Alta Mesa Resources, BCE-Mach III gains nearly 30 thousand barrels of oil equivalent per day (Mboe/d) of production, of which 67% is liquids. The joint venture also adds around 72 million barrels of oil equivalent (MMboe) of proved reserves, over 900 operated wells, and 130,000 net acres to its upstream portfolio.
Besides, the addition of Kingfisher Midstream gives BCE-Mach III a gas processing capacity of 350 million cubic feet per day (MMcf/d), 729km of gas gathering pipeline, 173.8km of oil gathering pipeline, and 50 million barrels of oil storage capacity among others.
At the time of signing the deal, Mach Resources CEO Tom Ward said: “This was a unique opportunity to acquire a sizeable cash-flowing asset with the supporting midstream infrastructure, through a bankruptcy process, in an area of our team’s expertise and still have an extensive inventory for future development.”
