Brigham Exploration Acquires Great Western Drilling Ltd.'s Non-Operated Assets in the Permian Basin

Rhea-AI Summary

Brigham Exploration (BEXP) has acquired Great Western Drilling 's non-operated assets in Texas and New Mexico, creating one of the largest private non-operated footprints in the Permian Basin. The acquisition includes over 7,000 net acres in the Delaware and Midland Basin, with August 2024 net production of ~2,700 boe/d from ~29 net producing wells. The deal closed on November 22, 2024, with an April 1, 2024 effective date.

Post-acquisition, BEXP's average net daily wellhead production is estimated at 15,500 boe/d from ~79 net producing wells. The company maintained a strong pro forma balance sheet with a leverage ratio below 1.0x, funding the acquisition through existing equity commitments, a new credit facility led by BOK Financial, and existing cash.

Positive

• Acquisition adds 7,000 net acres in strategic Permian Basin locations
• Increases production by 2,700 boe/d from 29 net producing wells
• Combined production reaches 15,500 boe/d from 79 net wells
• Maintains strong balance sheet with leverage ratio below 1.0x

Negative

• None.

Insights

Financial Analyst

The acquisition significantly bolsters BEXP's position in the Permian Basin, adding 7,000 net acres and 2,700 boe/d of production. The transaction's leverage ratio below 1.0% indicates prudent financial management and conservative debt levels. The combined production of 15,500 boe/d from 79 net producing wells creates substantial scale advantages and operational synergies. The strategic funding mix using equity commitments, a new credit facility and cash demonstrates balanced capital allocation. This acquisition strengthens BEXP's portfolio in premium areas of the Delaware and Midland Basin, potentially enhancing their cash flow generation and operational efficiency through increased scale.

Energy Sector Analyst

The acquisition is strategically positioned in prime Permian Basin locations, particularly in Eddy and Lea Counties, which are known for their superior well economics and robust production profiles. The non-operated structure allows BEXP to benefit from operational expertise of established operators while maintaining capital flexibility. The April 1, 2024 effective date suggests potential upside from production between the effective and closing dates. The geographic diversification across multiple counties reduces single-area risk and provides exposure to various geological sweet spots in both Delaware and Midland basins.

AUSTIN, Texas, Dec. 17, 2024 /PRNewswire/ -- Affiliates of Brigham Exploration ("BEXP"), a leading non-operated oil & gas company, announced today the acquisition of Great Western Drilling Ltd.'s ("GWDC") non-operated assets in Texas and New Mexico. The combination of the acquired assets and BEXP's existing portfolio creates one of the largest private non-operated footprints in the Permian Basin.

Acquisition Highlights

• Over 7,000 net acres in the Delaware and Midland Basin, located primarily in Eddy and Lea Counties, New Mexico, and Martin, Midland, Loving, and Winkler Counties, Texas
• August 2024 net production of ~2,700 boe/d from ~29 net producing wells
• Pro forma balance sheet is expected to remain strong with a leverage ratio below 1.0x
• The acquisition closed on November 22, 2024 with an effective date of April 1, 2024

Combined Asset Position

The acquisition is consistent with BEXP's strategic focus on core, high-quality properties with low geologic risk in the Permian Basin. Pro forma for the acquisition, BEXP's average net daily wellhead production is estimated to be ~15,500 boe/d in August 2024 from a combined ~79 net producing wells, including assets from both of BEXP's private funds. 

Management Comments

"This acquisition marks a significant milestone in BEXP's growth strategy," said Bud Brigham, BEXP's Executive Chairman.  "We believe this differentiated asset that was built over generations complements our existing asset base and enhances our Delaware and Midland Basin positions, which are diversified geographically and geologically across experienced operators in the Permian." Keith Lilie, President & CEO, commented, "This acquisition aligns with BEXP's overall portfolio strategy and meets the stringent criteria of our disciplined approach to evaluating acquisition opportunities."

BEXP funded the acquisition with existing equity commitments, a new credit facility led by BOK Financial, and existing cash on hand.

Advisors

Vinson & Elkins LLP served as legal counsel to BEXP.

Redfield Energy Advisors served as financial advisor and Lynch, Chappell & Alsup served as legal counsel to GWDC.

About BEXP

BEXP is a premier non-operated oil & gas acquisition and management company focused on assets in the Permian Basin of Texas and New Mexico. BEXP was founded in 2017 by its General Partner, Bud Brigham. Mr. Brigham has significant experience in the oil and gas industry, having founded seven companies since 1990.

For more information, please see brighamexploration.com or IR@bexp.com.

About The Brigham Platform

The Brigham Platform is an independent platform of oil and gas companies based in Austin, Texas led by Bud Brigham. With over 30 years of industry experience, Bud Brigham has founded and successfully grown multiple energy enterprises, including three of which have successfully IPO'd and three of which have had successful exits totaling over $9 billion. The Brigham Platform currently consists of four enterprises, each with a dedicated management team and a unique strategy, collectively aiming to capitalize on the long-term prospects for traditional energy sources while prioritizing innovation, capital discipline, and operational efficiency. Among its enterprises are Atlas Energy Solutions (NYSE:AESI), BEXP (non-operated oil & gas), Brigham Royalties (minerals & royalties), and Langford Energy Partners (operated oil & gas).

View original content:https://www.prnewswire.com/news-releases/brigham-exploration-acquires-great-western-drilling-ltds-non-operated-assets-in-the-permian-basin-302334004.html

SOURCE Brigham Exploration

FAQ

What assets did Brigham Exploration acquire in the Permian Basin?

Brigham Exploration acquired Great Western Drilling 's non-operated assets, including over 7,000 net acres in the Delaware and Midland Basin, located in Eddy and Lea Counties, New Mexico, and Martin, Midland, Loving, and Winkler Counties, Texas.

How much additional production did the acquisition add to Brigham Exploration?

The acquisition added approximately 2,700 boe/d of net production from about 29 net producing wells, as of August 2024.

What is Brigham Exploration's total production after the acquisition?

After the acquisition, Brigham Exploration's average net daily wellhead production is estimated to be approximately 15,500 boe/d from about 79 net producing wells.

How did Brigham Exploration finance the Permian Basin acquisition?

The acquisition was funded through a combination of existing equity commitments, a new credit facility led by BOK Financial, and existing cash on hand.

When did the Brigham Exploration acquisition close?

The acquisition closed on November 22, 2024, with an effective date of April 1, 2024.