Three Rivers is a privately-held exploration and production company with around 310,000 gross (200,000 net) acres in the Permian Basin, including large positions in the company’s core northern Delaware Basin play, the Midland Basin Wolfberry play, and the emerging southern Midland Basin horizontal Wolfcamp and Cline shale plays.
The assets boast proved reserves of about 58 million barrels of oil and estimated current net production of 7,000 barrels of oil equivalent per day.
“We are pleased to announce our largest and most strategic transaction since the Marbob acquisition nearly two years ago,” Concho chairman Timothy Leach said in a statement.
“Three Rivers represents a material consolidation opportunity within the proven core of the Delaware Basin, a continued expansion into the horizontal Wolfcamp and Cline shale plays in the southern Midland Basin, and a complementary addition to our core Yeso play.
“Combined with our existing portfolio, these assets give the company nearly 750,000 net acres across the Permian Basin, with exposure to some of the most exciting oil plays in the US.
Concho intends to finance the acquisition with borrowings under its $2bn credit facility, which had around $1.8bn available to be borrowed at 31 March 2012.
In addition, the company plans to sell $200m to $400m of certain non-core assets from the acquisition and its existing assets over the next nine months.
JP Morgan acted as Concho’s lead financial advisor, BMO Capital Markets acted as a financial advisor and Vinson & Elkins represented the group in connection with the deal.
Three Rivers is majority owned by Riverstone/Carlyle Global Energy and Power Fund IV, a private equity fund managed by Riverstone and launched together with global buyout giant Carlyle in 2007. The two firms have since stopped working together on new investments.
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