Allentown-based American Energy Partners recently purchased three existing oil and gas operators in Western Pennsylvania and West Virginia for more than $10.8 million.
“This transaction furthers our commitment to acquiring steady cash flowing businesses while enhancing our ability to develop alternative green energy opportunities with the vast amount of acreage included in the package,” American Energy CEO Brad Domitrovitsch said. “I am extremely pleased and look forward to welcoming their employees into the American Energy family.”
The transaction will be funded with a mix of debt and equity, and American Energy will acquire all stock and units of the three companies. The deal is expected to close on July 1 and is subject to customary closing conditions.
American Energy will hold 695 acres of 100-percent-owned surface and oil and gas rights in Pennsylvania and West Virginia. There will be no drilling commitments or obligations.
The deal will increase approximately $2 million in annualized revenue beginning in the third quarter of this year, based on current strip pricing.
It will vertically integrate in-house production and midstream operations.
American Energy’s board of directors approved the transaction. The board determined the purchases are in the company’s best interests because the acquisitions will immediately contribute to top-line revenue.
Josh Hickman, a 50 percent owner of the oil and gas businesses, serves on American Energy’s board of directors.