HighPeak Energy to Acquire Hannathon Permian Properties for $373.4 Million
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HighPeak Energy has entered into an agreement to acquire the Howard County assets of Hannathon Petroleum and other non-operated working interest owners. HighPeak currently owns non-operated working interest in approximately 60 percent of the acquired gross acreage position.
Purchase consideration due to the sellers, subject to customary closing adjustments, is comprised of $255 million in cash and approximately 3.78 million shares of HighPeak’s common stock. The transaction is expected to close early in the third quarter of 2022.
The company’s second strategic acquisition this year shows HighPeak’s willingness to enter the market for accretive bolt-on opportunities and adds further momentum to HighPeak’s growth strategy.
“We began our strategic expansion in the Signal Peak area in August 2021 by acquiring a non-operated ownership interest in these assets. Acquiring the balance of the working interest will bolster our drilling potential in the area and give us control of significant infrastructure to support, and accelerate, our development program in the region. This acquisition, coupled with our targeted leasing, has increased our total acreage position to over 91,000 net acres,” said Jack Hightower, HighPeak chairman and chief executive officer.
Acquisition highlights include:
• Accelerated Development Runway – ability to leverage substantial infrastructure-in-place to accelerate pace of Signal Peak development; HighPeak expects to maintain Hannathon’s existing one rig drilling program on the acquired acreage through 2022
• Increased Scale and Depth of Inventory – bolt-on acquisition adds approximately 150 net locations and 18,600 net acres largely contiguous to the company’s existing Signal Peak position with 2022E average production of 5 MBoe/d (85 percent liquids)
• Improved Cash Flow Generation – acquired at approximately a 3.0x multiple on 2022E EBITDAX with further uplift from synergies estimated at $70 million on a present value basis
About HighPeak Energy
HighPeak Energy, Inc. is a publicly traded independent oil and natural gas company, headquartered in Fort Worth, Texas, focused on the acquisition, development, exploration, and exploitation of unconventional oil and natural gas reserves in the Midland Basin in West Texas.
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