Ground Game Report: Prairie, Amplify Find A&D in Down Market
Amid a slowdown in headline-grabbing oil and gas M&A, Prairie Operating and Amplify Energy are staying busy with small-ball acquisitions and timely divestitures.
Mounting price swings and geopolitical uncertainty have pumped the brakes in the U.S. oil M&A market. WTI oil prices have swung between $55/bbl and $75/bbl since the Trump administration’s April 2 Liberation Day, fueling uncertainty across energy markets.
Still, companies are finding ways to fortify their portfolios amid the slowdown. Public E&Ps Prairie Operating and Amplify Energy announced transactions in the Denver-Julesburg (D-J) Basin and the Eagle Ford Shale to start the third quarter.
Prairie gobbles more D-J
Prairie Operating has been the most active consolidator in the D-J Basin in recent quarters.
On July 2, Prairie announced acquiring certain assets from Edge Energy II for $12.5 million in cash. The acquisition was financed through Prairie’s credit facility.
The Edge acquisition includes approximately 11,000 net acres (88% NRI) and a future inventory of 40, 2-mile lateral drilling locations. Current output totals 190 boe/d across 47 producing wells, both operated and non-operated.
“With a high working interest, established cash flow and development-ready drilling locations, this transaction aligns with our capital allocation strategy and adds near-term value and long-term inventory,” said Prairie Chairman and CEO Edward Kovalik.
Rextag data show that Edge Energy II’s acreage is in the northwestern corner of Weld County, Colorado.
The Edge Energy II deal includes eight approved permits and another eight permits in process. Prairie said the multi-well Simpson pad is fully permitted and ready to drill beginning in August 2025.
The deal expands Prairie’s D-J portfolio to approximately 60,000 net acres.
The fully permitted Simpson pad, sited near the town of Pierce, Colorado, is scheduled to begin development in August 2025, Prairie said. (Source: Rextag data)
The Bayswater deal included an average 26,000 boe/d (69% liquids) in net production across 24,000 net acres in Weld County. The deal also added 600 drilling locations and a decade of inventory.
The Bayswater assets had 77.9 MMboe in proved reserves with an estimated PV-10 value of $1.1 billion.
In the wake of its canceled transaction with Juniper Capital, Amplify Energy has shifted focus, simplifying its portfolio through the sale of non-operated Eagle Ford assets.
Amplify announced an agreement to sell all of its non-op working interests in the Eagle Ford to Murphy Exploration & Production for $23 million. The sale closed July 1.
Net proceeds from the divestiture will be used to pay down Amplify’s debt. The company said sale proceeds could help fund development at its Beta project offshore Southern California, where Amplify previously deferred activity.
“The sale of our non-operated Eagle Ford assets is an important step forward in the transformation of Amplify Energy to a more streamlined and focused enterprise,” said Amplify President and CEO Martyn Willsher.
“We believe monetizing proved reserves and reinvesting those proceeds in high-return development wells at Beta will be value enhancing to our shareholders.”
Approximately 3% of Amplify’s proved reserves and 4% of average daily net production in fourth-quarter 2024 were in the Eagle Ford. The non-operated properties held 2.5 MMboe of proved reserves and produced about 700 boe/d during the period.
Amplify has interests in Oklahoma, the Rockies, East Texas, northern Louisiana and offshore California. The company planned to grow further in the D-J Basin and the Powder River Basin through the Juniper deal.
But in a sharp reversal, Amplify canceled its planned acquisition of Rockies assets from Juniper, citing “extraordinary volatility in the market.” The deal, initially heralded in January as a “transformational combination,” would have added 287,000 net acres and 7,900 boe/d of production (81% oil).
Under the original terms, Amplify would have issued 26.7 million shares and assumed $133 million in debt, with the equity valued at $173 million based on the share price at the time.
However, since the initial announcement, Amplify’s stock plunged 58% to $2.69, reducing the deal’s equity value to just $72 million. The termination came amid a broader downturn in the oil market, with WTI crude falling to around $60/bbl due to global demand concerns and resurgent OPEC+ supply.
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