The acquired assets are primarily low-decline, proved developed producing (PDP) properties, characterized by a sub-7% annual base decline, ensuring stable cash flows and long-term value creation, Evolution said March 4. (Source: Shutterstock)
Evolution Petroleum Corp. has entered into a definitive agreement to acquire non-operated oil and natural gas assets in New Mexico, Texas and Louisiana for $9 million.
The acquisition, which Evolution said has a PV-10 of $15 million, expands the company’s portfolio and adds approximately 440 boe/d of net production (60% oil, 40% natural gas).
The portfolio consists of approximately 254 gross producing wells across all regions. The assets will be managed by a “top-tier private operator” and will be immediately accretive, Evolution said.
The acquired assets are primarily low-decline, proved developed producing (PDP) properties, characterized by a sub-7% annual base decline, ensuring stable cash flows and long-term value creation, Evolution said March 4.
The acquisition is expected to close by the end of third-quarter 2025 with an effective date of Feb. 1. The company intends to finance the acquisition through a combination of cash on hand and borrowings under its existing credit facility.
Kelly Loyd, president and CEO, said the acquisition is the company’s seventh in the past 6 years and strengthens Evolution’s production base while aligning with its growth strategy by adding “high-quality, low-decline production at an attractive valuation, estimated at ~2.8x NTM [next 12 months] Adjusted EBITDA.”
“These assets complement our existing portfolio and enhance our ability to generate stable free cash flow, which supports our long-standing commitment to returning capital to shareholders,” Loyd said. “We see additional upside through reactivations of existing waterfloods and through operational efficiencies, which will further enhance long-term value.”
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