Pedevco closes $28 million Weld County oil and gas deal

Oil and natural-gas company Pedevco Corp. (NYSE MKT: PED) said Monday that it closed on a $28 million deal to acquire 28,000 net acres and oil field operations in Weld County.

California-based Pedevco, doing business as Pacific Energy Development, said it paid cash for the assets, including territory in the lucrative Wattenberg oil field. The purchase from an undisclosed company had an effective date of Dec. 1, 2013.

Pedevco also said in its announcement Monday that it agreed to a joint venture with RJ Resources for a 50 percent working interest in the project. In order to finance the acquisition and provide the Company with sufficient capital to immediately begin development, Pedevco entered into a three-year term debt facility with RJ Resources.

SPONSORED CONTENT

Business Cares: April 2024

In Colorado, 1 in 3 women, 1 in 3 men and 1 in 2 transgender individuals will experience an attempted or completed sexual assault in their lifetime. During April, we recognize Sexual Assault Awareness Month with the hopes of increasing conversations about this very important issue.

As part of the transaction, RJ Resources will participate as a 50 percent working interest partner with Pedevco in the development of the assets. The deal will allow Pedevco to undertake a more aggressive drilling program in 2014, Pedevco said.

Pedevco closed a $34.5 million loan to facilitate the purchase of the acreage and is establishing a $15.5 million drilling facility for developing the new acreage.

As a result, Pedevco has an interest in 14,000 net acres after closing. The company has drawn down $34.5 million of a $50 million dollar debt facility, and can draw down the remaining $15.5 million for drilling capital to develop the new acreage.

The company also closed Friday an offering of 3.4 million shares of common stock that generated almost $7.4 million before deducting underwriting discounts and estimated offering expenses.

Pedevco, meanwhile, cancelled 3.3 million shares of common stock held in escrow resulting in a reduction in the number of the company’s shares of common stock to 26.3 million shares issued and outstanding.

Casimir Capital LP in New York City served as Pedevco’s financial advisor in the acquisition and debt financing transactions.

“We believe that this acquisition transforms our company into one of the key players in the prolific Niobrara play,” Pedevco CEO Frank Ingriselli said in a statement.