Editor's note: This article has been updated to include the deal's purchase price.
U.S. Energy Development Corp. (USEDC) has acquired approximately 20,000 net acres in Reeves and Ward counties from an undisclosed seller for $390 million, significantly expanding its holdings in the Permian Basin.
The position includes a substantial proved producing component and multi-year drilling inventory to supplement the firm’s existing footprint in the area. It's the largest acquisition in the company’s 45-year history.
“This transaction greatly enhances the overall quality and resilience of our portfolio, supplementing our reserves with additional proved producing assets, adding years of multi-bench drilling inventory, and expanding our operated economies of scale,” said Jordan Jayson, CEO and chairman of USEDC. “These factors position USEDC for sustained, efficient growth and reinforce our commitment to delivering long-term value for our partners.”
USEDC plans to run a dedicated drilling rig on the acquired acreage, making this acquisition a key component of USEDC’s 2025 plan to invest up to $1 billion in U.S. oil and gas properties.
In 2024, the firm deployed approximately $850 million in operated and non-operated oil and gas projects in the basin. The firm’s team continues to evaluate opportunities that align with its disciplined investment strategy and can deliver value to our partners.
USEDC is also increasing its borrowing base under its revolving credit facility with Citibank from $165 million to $300 million. The facility has a maximum credit amount of $500 million.
RBC Richardson and Willkie Farr & Gallagher LLP were advisers for the transaction.
Citibank NA led the financing syndicate. TCBI Securities Inc., U.S. Bank National Association, Washington Federal Bank and KeyBank served as joint lead arrangers and bookrunners. Sidley Austin LLP served as legal counsel to USEDC on its credit facility.