Evolution Petroleum Corp. closed on its acquisition of mineral and royalty interests in Oklahoma’s SCOOP/STACK from a private seller in a cash transaction valued at approximately $17 million, Evolution said Aug. 6.
The assets include approximately 5,500 net royalty acres across Oklahoma’s Grady and Canadian counties and hold approximately 420 gross proved developed producing wells.
It includes more than 650 drilling locations and about 140,000 gross acres for more than 10 years of projected drilling inventory.
The acquisition was effective May 1. Net production at the time is estimated at approximately 420 boe/d (54% natural gas, 15% oil and 31% NGL).
Operators of the acreage include Camino Natural Resources, Canvas Energy, Coterra Energy, Mach Resources and Validus Energy.
The deal was funded through a combination of cash on hand and borrowings from the company’s existing credit facility.
“We value this transaction utilizing similar metrics as we would for a non-op working interest acquisition, particularly when accompanied by substantial development upside that we expect will maintain or grow cash flow and significantly enhance our ability to pay dividends to our shareholders for years to come,” said Evolution Petroleum President and CEO Kelly Loyd.
"We’re particularly enthusiastic about the anticipated robust, perpetual cash flows from the approximate 400 producing wells, along with over 650 undrilled locations that come with zero future capital obligations which presents meaningful upside,” he added.