Published: January 26, 2023 |

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Permian Resources Corporation has entered into a series of portfolio management transactions, comprising of a bolt-on acquisition, a divestiture of non-operated production and acreage, and a divestiture of a portion of its water infrastructure assets in Reeves County, Texas.

“At Permian Resources, we believe our focus on portfolio management will continue to drive value for our shareholders. The combined transactions high-grade our portfolio, adding 45 top-quartile locations, 4,000 net acres with significant development potential and 3,100 net royalty acres while generating approximately $100 million in net cash proceeds,” said James Walter, Co-CEO of Permian Resources.

ACQUISITION SUMMARY

Permian Resources has entered into a definitive agreement to acquire 4,000 net leasehold acres, 3,300 net royalty acres and 1,100 barrels of oil equivalent per day (Boe/d) (73 percent oil) of net production, located predominantly in Lea County, New Mexico from an undisclosed third-party for a total purchase price of $98 million.

This purchase price reflects an acquisition value of approximately $8,000 per net leasehold acre and approximately $7,000 per net royalty acre. The properties’ operated position consists of largely undeveloped acreage and is contiguous to one of the company’s existing core blocks in Lea County.

Permian Resources has identified approximately 45 gross operated two-mile locations from the properties being acquired that immediately compete for capital within the existing portfolio. The acquired properties also include non-operated acreage largely adjacent to and surrounding Permian Resources’ position, which the company plans to utilize for future acreage trades and other portfolio management transactions.

NON-OPERATED DIVESTITURES SUMMARY

Permian Resources has also divested producing, non-operated properties in Reeves County consisting of approximately 1,800 Boe/d (44 percent oil) and 3,500 net leasehold acres to an undisclosed third-party for $60 million, reflecting a valuation multiple of greater than 5x 2023 estimated EBITDA. The divested acreage represents the substantial majority of the company’s non-operated position in Texas and included minimal remaining inventory.

The company also sold a non-operated position consisting of 300 net leasehold acres in Eddy County, New Mexico for $35,000 per net acre, resulting in approximately $10 million of net proceeds.

MIDSTREAM INFRASTRUCTURE TRANSACTIONS SUMMARY

The company signed definitive agreements with an undisclosed third-party that result in Permian Resources divesting a portion of its saltwater disposal wells and associated produced water infrastructure in Reeves County for total consideration of $125 million. The full consideration will be received at closing with $60 million subject to repayment if certain thresholds tied to Permian Resources’ future drilling activity in the service area over the next several years are not met.

The company expects to retain the full consideration based on its current development plan. The counterparty has a strong record of operating midstream assets, and the divested infrastructure has ample additional capacity to service the company’s future produced water disposal needs. The transaction is expected to close during the first quarter of 2023, subject to regulatory approval.

About Permian Resources
Headquartered in Midland, Texas, Permian Resources is an independent oil and natural gas company focused on the responsible acquisition, optimization and development of high-return oil and natural gas properties. The company’s assets and operations are located in the core of the Delaware Basin.

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