US-based Abraxas Energy Partners LP has struck a deal on buying oil and gas properties from St. Mary Land & Exploration Co. for $140 million.
Under the terms of the agreement, Abraxas Energy will buy 1,500 wells with estimated proved reserves of 10.25 million barrels of oil equivalent as of December 1. These properties are located in the Rockies and Mid-Continent regions and are producing about 2,050 barrels of oil equivalent per day.
Up to 52% of these properties are oil producing, while the balance are natural-gas producing. The acquisition is subject to customary closing conditions and purchase price adjustments and is expected to close during the first quarter of 2008.
Abraxas Energy intends to initially finance the purchase with borrowed money from an amended credit facility structured by Societe Generale. Abraxas Energy had been planning an initial public offering. However, because of this acquisition, those plans are being pushed back to a later date.
San Antonio-based Abraxas Petroleum Corp. created Abraxas Energy as a limited partnership in mid-2007 in partnership with institutional investors. Abraxas Petroleum raised $100 million off the sale of limited partnership units to institutional investors. (The company, which is the general partner, still owns a 47% stake in the limited partnership.) (San Antonio Business Journal)