#United States #Fort Worth #Citibank #USEDC #Permian Basin

U.S. Energy Development Corporation Expands Permian Footprint

In a remarkable move, U.S. Energy Development Corporation (USEDC) has broadened its presence in the prestigious Permian Basin by acquiring approximately 20,000 net acres across Reeves and Ward Counties, Texas. This acquisition, valued at $390 million, marks a landmark achievement as it stands as the largest single transaction in the company’s 45-year history. Such an expansion not only elevates USEDC’s holdings but also positions the company strategically for future growth.

Key Highlights of the Acquisition

The acquisition includes significant proved producing assets alongside a multi-year drilling inventory, which is anticipated to complement USEDC’s already robust operational footprint in the region. This move is regarded as a pivotal enhancement of the overall quality and resilience of USEDC’s portfolio. Jordan Jayson, CEO and Chairman of USEDC, noted, “This transaction greatly enhances the overall quality and resilience of our portfolio, adding years of multi-bench drilling inventory and bolstering our operated economies of scale.”

By incorporating additional reserves with proven production capabilities, USEDC is well-positioned for sustained growth amidst fluctuating market conditions. The firm plans to operate a dedicated drilling rig on the newly acquired acreage, forming a crucial aspect of its strategic plan to invest up to $1 billion in oil and gas properties throughout the year.

Extensive Investment Plans for 2025

For the year 2024, USEDC has already invested around $850 million into various operated and non-operated oil and gas ventures in the Permian Basin. The team is poised to evaluate potential opportunities that align with its disciplined investment strategy, ensuring that any new projects will provide value to its partners. This careful approach to growth reflects the company’s commitment to responsible energy production and its capability to adapt to industry dynamics.

The acquisition was facilitated with guidance from RBC Richards Barr, while Willkie Farr & Gallagher LLP provided legal advice to USEDC for the transaction. Such strategic collaborations underline the importance of having strong allies in the competitive exploration and production landscape.

Financial Flexibility via Credit Facility

In conjunction with this noteworthy acquisition, USEDC has also announced an increase in its revolving credit facility, led by Citibank, N.A., escalating the borrowing base from $165 million to $300 million. This expansion allows for greater financial agility, enabling USEDC to pursue ongoing and new growth opportunities without compromising on operational integrity. As Brandon Standifird, the Chief Financial Officer of USEDC, mentioned, “The upsize of our revolving credit facility underscores our lenders' confidence in USEDC's disciplined strategy.”

The facility now boasts a maximum credit limit of $500 million, which serves as a financial cushion supporting USEDC’s plans for further expansion in the rapidly evolving energy market.

About U.S. Energy Development Corporation

Founded in 1980 and headquartered in Fort Worth, Texas, U.S. Energy Development Corporation specializes in exploration and production. The company manages assets for itself and partners, focusing on operational and financial innovation. Through its operations, USEDC has invested in more than 4,000 wells across 13 states and into Canada, deploying over $3 billion on behalf of itself and its partners. Its ongoing commitment to responsible energy development positions it as a leader in the industry. To learn more about USEDC, visit their website at usedc.com.

The recent acquisition and operational expansion reflect USEDC's dedication to achieving long-term sustainability and maximizing value for stakeholders in the ever-competitive energy sector.