The Joplin Globe, Joplin, MO

Business

April 4, 2013

Midstates buys oil-producing properties for $620M

HOUSTON — Midstates Petroleum Co. said Thursday that it agreed to buy oil producing properties as well as developed and undeveloped land in Texas and Oklahoma from Panther Energy LLC and two of its partners for $620 million in cash.

The Houston-based exploration and production company said the deal adds about 36.4 million barrels of oil equivalent proved reserves that are 45 percent oil and 21 percent natural gas liquids. Midstates expects the deal to increase its net current daily production by about 8,000 barrels of oil equivalent per day.

The deal also expands the company’s acreage position by about 140,000 net acres, along with about 280 gross producing wells that are over 80 percent operated. Midstates said it expects to drill about 40 to 45 wells on the new acreage this year.

Midstates said it expects the acquisition to immediately boost its earnings. The company said it has secured $620 million in bridge loan commitments and plans to permanently finance the deal by raising $725 million to $750 million in debt and equity.

Panther’s partners include Red Willow Mid-Continent LLC and Linn Energy Holdings LLC. Both Panther and Red Willow are subsidiaries of the Southern Ute Indian Tribe Growth Fund, which manages that tribe’s business ventures.

The deal is effective April 1 and is expected to close on or about May 31.

Midstates Petroleum shares finished at $7.38 on Wednesday. They are up 57 percent from their 52-week low of $4.71 in November. They peaked for the past year at $16.95 per share last April.

 

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