Argent Energy acquires Wyoming oil-producing assets

Argent Energy Trust has completed the acquisition of oil-producing assets in Wyoming, US, for approximately $102m.

The purchased oil properties are characterised by low-decline production and are expected to generate significant free cash flow. The acquisition is consistent with Argent’s business plan of building a high netback and low-decline production base.

Working interest oil production from the Wyoming assets is more than 1,000 barrels of oil equivalent per day (boe/d) at present.

Through 2014, Argent hopes to maintain production levels of at least 1,000boe/d with minimal operational activity or capital investment and will operate the majority of the Wyoming assets.

The assets are also said to produce free cash flow beyond the capital required to maintain production from the acquired assets.

Accretive to Argent’s cash flow per unit, the acquisition provides geographic diversification, and adds immediate incremental oil production and reserves to the company’s overall asset base.

Post completion of the acquisition, current production for Argent is over 7,000boe/d compared to 5,700boe/d, representing an increase from its third quarter average of around 5,400boe/d.

Argent has also amended its credit facility in connection with the acquisition to increase the borrowing base under the facility to $160m.

After closing the acquisition, the company hopes to have approximately $127m drawn on its credit facility, which will be cut down to approximately $71m drawn upon closing the previously announced $60m convertible debenture offering expected on 31 October.