DENVER--(BUSINESS WIRE)--Phoenix Capital Group has acquired nearly 600,000 net mineral acres from AgWest Farm Credit. The assets acquired are spread across four states, with more than 50,000 net mineral acres in the oil-rich counties of Richland and Roosevelt on the Montana side of the Bakken formation.
The transaction, which closed on January 5, 2024, represents one of the largest single acquisitions the company has ever made.
The minerals acquired through this deal are currently producing approximately $200,000 in royalties per month. The cash flow for 2023 reached $2.47 million, and this figure is expected to experience substantial growth as Phoenix Capital Group further develops the acreage.
Currently, there are 441 stable producing, shallow decline wells on the acreage across the mineral interests acquired from AgWest Farm Credit, and there are well over 100 new well locations that can and likely will be drilled in the future across the acquired land.
Justin Arn, Chief Land and Title Officer at Phoenix Capital Group, commented on the acquisition, stating, "When Phoenix Capital Group discovered that AgWest Farm Credit was considering divestment of its mineral and royalty assets, our team swung into action. While deals like these are considered a 'once-in-a-generation' occurrence in the oil business, due to their overall size and complexity, Phoenix Capital Group was founded precisely to become the preferred buyer for these large divestments."
Phoenix Capital Group has been actively acquiring minerals and leasehold in Richland and Roosevelt counties since 2019. The Montana side of the Bakken formation continues to be a focus area for the company, as the state offers some of the most attractive investment opportunities in the Williston Basin.
Tom Kruk, VP, Mineral Acquisitions and Partner at Phoenix Capital Group, was first informed about the land sale by the Director of Minerals Management at Agribank, the entity managing minerals for AgWest Farm Credit. Kruk's established relationship with her over the years, primarily through leasing, sparked excitement about the prospect of an innovative company with a top-notch operating wing assembled and ready to drill where others can’t or won't.
Over the years, Phoenix Capital Group has built its brand on speed and accuracy. Within a few weeks of being approached by the Seller of the land, the company was well on its way to formalizing the transaction.
The sale was unique in every way, as it was sourced off-market directly with AgWest Farm Credit.
Justin Arn added, "Every aspect of the company was built around properly assessing value, running title, and managing these assets for our investors. What is particularly notable about this purchase, beyond just the size and scope, is that Phoenix Capital Group is one of the only mineral buyers in the country positioned to capitalize on these mineral rights by accessing them directly through our operating arm, Phoenix Operating. In that regard, this sale represents a massive boon not just for Phoenix Capital Group and AgWest Farm Credit, but for all mineral owners in Richland and Roosevelt counties, as new production on these lands will benefit the surrounding mineral owners throughout the region."
This acquisition aligns with Phoenix Capital Group's strategic goal of expanding its asset footprint in Montana, enabling the company to capitalize on bolt-on opportunities and strengthen its existing position through further acquisitions. By achieving greater scale in the state, Phoenix Capital Group is better positioned to deliver enhanced efficiency and value to its stakeholders. Through this transaction alone, in addition to the initial 100 new development locations in core areas of Richland and Roosevelt County, Phoenix Capital Group anticipates this figure will grow as the area is further developed and de-risked.
Now that the transaction is officially closed, Phoenix Capital Group is eager to collaborate with all mineral owners and existing operating partners. The focus remains on fostering sustainable growth and maximizing the potential of the newly acquired assets. Phoenix Capital Group is committed to working closely with its partners to unlock value and contribute positively to the economic fabric of Montana.
For more information on Phoenix Capital Group, please visit phxcapitalgroup.com.
About Phoenix Capital Group:
Founded in 2019, Phoenix Capital Group Holdings, LLC is a leading oil and gas mineral rights acquisition and non-operated working interest company headquartered in Denver, Colorado. The family-owned company is a technology-led and client-centric focused organization dedicated to developing partnerships with its clients through property acquisitions and investment opportunities. With a team of experienced professionals with expertise in software development, engineering, and finance, Phoenix Capital Group boasts over 60 years of combined experience in the energy sector, focusing on capital deployment and asset management.
About AgWest Farm Credit:
AgWest Farm Credit (formerly Northwest Farm Credit and Farm Credit West) is a $30 billion financial cooperative that provides financing and related services to farmers, ranchers, agri-businesses, commercial fishermen, timber producers, rural homeowners, and crop insurance customers in a seven-state territory in the Western United States. AgWest Farm Credit is part of the 107-year-old Farm Credit System – the leading provider of credit to American agriculture. AgWest Farm Credit serves customers in 59 locations throughout the West. For more information, go to agwestfc.com.