Colgate Energy Partners III LLC, Midland, Tex., has grown its Permian basin footprint with a signed deal to acquire most of the assets owned by Luxe Energy LLC.
Luxe will continue to own and manage certain assets including a portion of the non-operated leasehold interests that are operated by MDC Reeves Energy LLC and its affiliates.
Colgate acquires from Luxe 22,000 net acres adjacent to its existing position in Reeves and Ward counties, Tex., current average net daily production of 17,000 boe/d, some 5,000 gross surface acres, and 1 rig running focused on Luxe’s existing Ward County position.
The combination holds about 57,000 net acres, some 45,000 boe/d, and 4 rigs running as of June 1.
“The acquisition of Luxe is a transformational event that positions Colgate as one of the largest private companies in the Permian. It allows both Colgate and Luxe stakeholders to take advantage of increased scale while generating substantial free cash flow. This transaction enhances our already best-in-class balance sheet and puts us in a position of strength as we look to opportunistically pursue further consolidation,” stated James Walter, Co-Chief Executive Officer of Colgate.
Luxe Energy was formed in 2015 with an equity commitment from NGP Natural Resources XI LP and management.
Closing of the all stock deal occurred simultaneously with signing of a definitive agreement on June 1.