TXO Partners expands with Williston Basin asset acquisition

TXO Partners, L.P., a Delaware-based crude petroleum and natural gas company, has announced the completion of a significant acquisition and financial adjustments as per its latest SEC filing. On August 30, 2024, TXO Partners, under the banner of 01 Energy & Transportation, finalized the purchase of producing oil and gas assets located in the Williston Basin of Montana and North Dakota, expanding its operational footprint.

The acquisition from EMEP Acquisitions, LLC and VR4-ELM, LP was settled with a combination of cash and equity, totaling $241.8 million in cash and 2,500,000 common units in TXO Partners. The cash payment was partly funded through the net proceeds from the issuance of 7,475,000 common units and borrowings under the company's revolving credit facility.

Simultaneously, TXO Partners entered into a material definitive agreement, amending its existing credit agreement. The amendment increases the available aggregate commitments from $165.0 million to $275.0 million, extends the maturity date to August 30, 2028, and includes new lenders.

In connection with the asset acquisition, TXO Partners and the sellers also signed a registration rights agreement, ensuring the resale of the equity consideration under the Securities Act of 1933. This agreement grants the sellers certain demand rights and piggy-back registration rights, subject to conditions.

The acquisition and financial maneuvers reflect TXO Partners' strategic growth and investment in its core business areas. The company's stock, traded on the New York Stock Exchange under the ticker NYSE:TXO, may see investor interest as these developments unfold.

In other recent news, TXO Partners, a key player in the crude petroleum and natural gas industry, has made significant strides in its financial operations. The Fort Worth, Texas-based firm recently completed the sale of an additional 975,000 common units at $20.00 each, pulling in gross proceeds of $19.5 million before underwriting discounts and commissions.

This move follows TXO Partners' recent public offering of 5 million common units, which was intended to partially fund its acquisitions from Eagle Mountain Energy Partners and another private company.

In the event that the planned acquisitions do not proceed, TXO Partners intends to use the proceeds to repay outstanding debts under its revolving credit facility. Raymond James has been named as the sole book-running manager for the offering.

InvestingPro Insights

TXO Partners' recent acquisition in the Williston Basin underscores its strategic expansion efforts. In light of these developments, key metrics from InvestingPro provide a clearer financial picture. The company holds a market capitalization of $756.74 million, reflecting its size and market value in the industry. Despite a challenging period with a negative revenue growth of -24.96% over the last twelve months as of Q2 2024, TXO Partners has maintained a strong gross profit margin of 51.3%, which suggests efficient cost management relative to its sales.

Investors may be particularly interested in the company's dividend yield, which stands at an impressive 11.57%, coupled with a dividend growth of 14.0% over the same period. This indicates that TXO Partners is committed to returning value to its shareholders. Additionally, two InvestingPro Tips highlight the company's financial health: TXO Partners holds more cash than debt on its balance sheet, and it pays a significant dividend to shareholders. These factors could be pivotal in attracting investors looking for stable returns in a volatile market.

For those considering adding TXO Partners to their portfolio, there are 6 additional InvestingPro Tips available, which provide further insights into the company's performance and potential. The current fair value estimates from analysts stand at $28.5, while InvestingPro's fair value calculation is slightly lower at $22.11, suggesting room for growth based on current market pricing.

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