Cadence, Others Finance Black Ridge Assets Acquisition of Williston Basin
Black Ridge Oil & Gas announced it has signed a definitive purchase and sale agreement with a private party to acquire certain producing oil and gas wells and development acreage in the Williston Basin for $20.5 million, subject to certain purchase price adjustments as defined in the PSA.
Black Ridge will finance the acquisition with availability from its senior secured credit facility with Cadence Bank and its second lien credit facility with Chambers Energy Management, and cash on hand.
In conjunction with the closing of the transaction, Cadence agreed to increase the company’s borrowing base from $7 million to $18 million. The Cadence borrowing base is subject to periodic redeterminations based on changes to the company’s reserve base. Black Ridge expects the availability under both facilities to grow as it continues to acquire and develop new, high value leaseholds in the heart of the Bakken and Three Forks development fairway. As of November 20, 2013, Black Ridge had not drawn from the Cadence facility and had an additional $10 million of availability under its Chambers facility.
Ken DeCubellis, Black Ridge’s CEO, said, “This transaction demonstrates management’s ability to utilize our platform to aggregate high return, quality assets in the heart of the Bakken / Three Forks development fairway to grow our drilling inventory, production and proved reserves in a meaningful way. While the immediate increase in production and cash- flow are a benefit to the company, the real long-term value of this acquisition is in the high return development projects and drilling inventory.”