OKLAHOMA CITY–(BUSINESS WIRE)–BCE-Mach III LLC (“BCE-Mach III”), the third partnership between Bayou City Energy Management LLC (“BCE”) and Mach Resources LLC (“Mach”), has executed Purchase and Sale Agreements to acquire substantially all of the upstream oil and gas assets of Alta Mesa Holdings, LP and its subsidiaries (“AMH”), and the midstream assets of Kingfisher Midstream, LLC and its subsidiaries (“KFM”) as part of the sellers’ Chapter 11 bankruptcies and associated 363 sale processes.
The purchase agreements provide that BCE-Mach III will acquire approximately 30 Mboe/d of production (67 percent liquids), approximately 72 MMboe of proved reserves, more than 900 operated wells, and 130,000 net acres (90 percent HBP) from AMH as well as gas processing capacity of 350 MMcf/d, 453 miles of gas gathering pipeline, 157 Mbw/d produced water system capacity, 224 miles of water disposal pipeline, 108 miles of oil gathering pipeline and 50 Mbbl oil storage capacity from KFM for a combined purchase price of $320 million with a Jan. 1, 2020 effective date.
“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,” said Mach CEO Tom L. Ward. “Our strategic aim in partnership with BCE has been to aggressively consolidate and maximize underdeveloped, undercapitalized or otherwise distressed areas in the Mid-Continent. We have been successful in buying assets at a discount, increasing production in a cost-effective manner and avoiding overspending. In a lot of ways, we have gone back to the fundamentals that were true when I began my career.”
“BCE is thrilled to be making another attractive acquisition in the Mid-Continent in conjunction with Mach Resources,” said BCE Founder and Managing Partner Will McMullen. “We know these particular assets well and are confident that the Mach team will be able to operate them in a manner suitable to the current macro environment, focused on maximizing free cash flow generation and delivering a sustainable, conservatively leveraged return to our investors. We continue to be encouraged by the opportunities we see to further consolidate assets in the Mid-Continent under the BCE-Mach banner.”
This acquisition represents the sixth acquisition by partnerships between BCE and Mach. To date, BCE-Mach LLC has made three acquisitions in the Mississippi Lime, and BCE-Mach II LLC has made two acquisitions in the Western Anadarko Basin. This acquisition of AMH and KFM represents the first acquisition in the newly formed BCE-Mach III LLC. Following closing, on a combined basis, the BCE-Mach partnerships will have net daily production of ~58 Mboe/d, interests in over 5,700 wells and ~500,000 net acres across the Mid-Continent.
Closing is expected to occur in February 2020 and is subject to customary conditions and purchase price adjustments. BCE-Mach III is being represented by Kirkland & Ellis LLP as legal advisor and UBS Securities LLC as financial advisor.
About Mach Resources LLC
Mach is an independent oil and natural gas producer focused on acquiring, exploring and developing high-return, low-cost projects. Founded in January 2017, the company pursues assets with production history and development opportunity. Mach is located in Oklahoma City, OK.
About Bayou City Energy
BCE is a private equity firm founded in 2015 to focus on making investments in the North American upstream oil and gas sector. BCE targets privately negotiated investments through two complementary strategies; providing buyout and growth equity capital for operated assets with current production and exploitable upside and partnering with operators to provide dedicated drilling capital in off-balance sheet structures. The BCE team, combined with the firm’s Advisory board and strategic relationship with Ara Partners Group LLC, provides operators access to expertise, capital, and trusted partnership.