Ranger Oil Corp. agreed to add 17,000 net acres to its Eagle Ford position through three “bolt-on” acquisitions for a total purchase price of roughly $64 million in cash, the pure-play Eagle Ford Shale producer said on May 3.
“As consolidation in the Eagle Ford continues, we see additional attractive opportunities that, at the right valuation, could add both immediate and long-term value to shareholders,” Darrin Henke, Ranger’s president and CEO, commented in a company release.
Based in Houston, Ranger Oil is a pure-play independent oil and gas company engaged in the development and production of oil, NGL and natural gas, with operations in the Eagle Ford Shale in South Texas. Previously known as Penn Virginia, the company rebranded last October following an all-stock combination with Lonestar Resources US Inc.
On May 3, Ranger Oil said it signed separate agreements to acquire the three “bolt-on” oil producing properties in the Eagle Ford Shale contiguous to Ranger’s existing assets. With the addition of approximately 17,000 net acres at closing, Ranger will have more than 155,000 net acres, a greater than 10% increase from year-end 2021, according to the company release.
Ranger noted it had identified significant and highly economic near-term development opportunities in the bolt-on acquisitions with approximately 19 miles of shared leaselines with Ranger's current acreage enhancing existing development plans through longer-lateral wells and increased working interest. The substantial operational synergies also mitigate the need for additional rigs and services, further strengthening capital returns, the company added.
“These strategic and accretive acquisitions of adjacent oil-weighted assets further demonstrate the strength of our business and our strategy of delivering shareholder value through a variety of avenues,” Henke said.
Last month, Ranger launched a $100 million share repurchase program after reducing its leverage to the company’s previously stated target of less than 1.0x. Ranger’s plans to fund the total purchase price of $64 million in cash for the three acquisitions using free cash flow will help maintain its strong balance sheet, according to its release.
“We are firmly committed to disciplined capital allocation, the preservation of our strong balance sheet and using internally-generated cash flow to bolster our portfolio and grow shareholder value,” Henke added.
The acquisitions are expected to close early in the third quarter, subject to customary closing conditions. The sellers involved were not disclosed.
Upon closing, Ranger expects a low decline, stable production of approximately 1,000 boe/d (65% oil / 87% liquids) that it said creates a solid free cash flow profile, maintaining its strong capital structure and enhancing Ranger’s framework to return cash to shareholders.
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