Empire Petroleum Announces Closing of Acquisition of Oil and Natural Gas Assets in North Dakota's Landa Madison Unit and New Birdbear Focus Area in Central-West Williston Basin
April 20 2022 - 7:00AM
Business Wire
Acquisition Provides Immediate Accretive Cash
Flow and Increased Scale with Minimal Incremental Overhead
Empire Petroleum (NYSE American: EP) ("Empire" or the
"Company"), an oil and gas company with current producing assets in
Texas, Louisiana, North Dakota, Montana and New Mexico, announced
today that it has closed the acquisition of operated and
non-operated oil and natural gas assets from a publicly-owned oil
and gas company on April 1, 2022. The acquired assets are located
in the Landa Madison and Landa West Madison Units in Bottineau
County, North Dakota and the Birdbear Area in Golden Valley and
Billings County, North Dakota.
Acquisition Highlights
- Provides immediate accretive cash flow and increased scale with
minimal incremental overhead;
- Increases North Dakota pro forma net production by an estimated
24% to approximately 9,250 barrels of oil equivalent per
month(1);
- Evaluated solely on proved developed producing ("PDP") reserves
based on forward prices substantially below current levels;
- Adds approximately 700,000 BOE of long-life PDP
reserves(2);
- Doubles the leasehold position of Empire’s operated Landa Field
and creates a uniform wholly-operated field with calculated
original oil in place (OOIP) of approximately 6.5 million
barrels;
- The Birdbear Play in Central Western North Dakota adds a new
potential consolidation play in the Williston Basin’s prolific
Devonian formations; and
- Transaction funded from cash on hand.
The acquisition includes an average operated working interest of
92% and an average net revenue interest of 73% in 15 operated
producing wells along with an average non-operated working interest
of 6% and average non-operated net revenue interest of 5% in 9
wells currently operated by Empire. The acquisition also includes
2,482 net leasehold acres. Current estimated gross daily production
from the assets are approximately 118 barrels of oil.
"We are pleased to successfully close on another accretive
transaction - the acquisition of both operated and non-operated oil
assets in the prolific and long-life Williston Basin in North
Dakota," said Mike Morrisett, President. "Empire has a clear
strategy based on evaluating and executing bolt-on transactions
that meet similar criteria while keeping debt levels at a
conservative level. We remain focused on organic growth while
securing additional incremental long-life and low-decline reserves
that generate strong cash flow."
"Empire’s purchase of the Landa Madison Unit and the addition of
non-operated interests to our existing Landa West Madison Unit
completes a mission that our team embarked on starting shortly
after our purchase of properties from EnergyQuest II in 2019,"
added Tommy Pritchard, Chief Executive Officer. "Putting the two
units together makes great development sense and we believe this
field has the potential to grow and become one of our larger
producing assets in North Dakota. Additionally, the Devonian
Birdbear Formation holds great promise for Empire as an area that
has all the criteria that our team looks for in oil and gas assets.
Birdbear has similar attributes to those found on the Eastern
flanks of the Williston Basin in Bottineau County and can be easily
operated from our current North Dakota infrastructure."
Notes:
(1) Pro forma production estimate based on average six months
ended 3/31/2022. (2) Reserves calculations are based on
Company-engineered reserves estimates as of 2/1/2022 at fixed
12/31/2021 SEC prices of $3.64/MMBTU and $66.55/barrel.
About Empire Petroleum
Empire Petroleum Corporation is a publicly traded, Tulsa-based
oil and gas company with current producing assets in Texas,
Louisiana, North Dakota, Montana and New Mexico. Management is
focused on targeted acquisitions of proved developed assets with
synergies with its existing portfolio of wells. More information
about Empire can be found at www.empirepetrocorp.com.
Safe Harbor Statement
This release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section
21E of the Securities Exchange Act of 1934. Forward-looking
statements involve a wide variety of risks and uncertainties, and
include, without limitations, statements with respect to the
Company’s estimates, strategy and prospects. Such statements are
subject to certain risks and uncertainties which are disclosed in
the Company’s reports filed with the SEC, including its Form 10-K
for the fiscal year ended December 31, 2021, and its other filings
with the SEC. Readers and investors are cautioned that the
Company’s actual results may differ materially from those described
in the forward-looking statements due to a number of factors,
including, but not limited to, the Company’s ability to acquire
productive oil and/or gas properties or to successfully drill and
complete oil and/or gas wells on such properties, general economic
conditions both domestically and abroad, and other risks and
uncertainties related to the conduct of business by the
Company.
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version on businesswire.com: https://www.businesswire.com/news/home/20220420005132/en/
Empire: Tommy Pritchard, CEO Mike Morrisett, President
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