PEDEVCO Seals DJ Basin Deal - Analyst Blog
March 12 2014 - 6:00PM
Zacks
On Mar 10, 2014, independent energy firm PEDEVCO
Corp. (PED) declared that it has purchased roughly 28,000
net acres of land along with 40 wells in the Colorado-based DJ
Basin. PEDEVCO acquired the properties from an U.S-based energy
firm for a cash consideration of $28.0 million.
For financing the asset purchase and to initiate drilling
operations in the newly acquired properties, PEDEVCO has inked a
3-year term debt agreement with RJ Resources. PEDEVCO added that as
a portion of the deal, RJ Resources is expected to have a 50%
working interest in the acquired assets.
Under the 3-year debt deal, PEDEVCO is eligible to take $50.0
million of debt from RJ Resources. Of which, PEDEVCO has already
taken $34.5 million for purchasing the asset, while the remaining
will be drawn for drilling operations in the acquired
properties.
PEDEVCO expects to considerably improve its daily output in the DJ
Basin through the new asset purchase. This will also benefit
shareholders in the form of increased cash flow.
Danville, CA-based PEDEVCO is involved in the acquisition and
development of U.S and Asia based shale oil and gas properties. The
primary assets of PEDEVCO also consist of Niobrara acreage in the
DJ Basin.
PEDEVCO currently retains a Zacks Rank #2 (Buy), implying that it
is expected to outperform the broader U.S. equity market over the
next 1 to 3 months.
One can also consider better-ranked players in the energy sector
like Range Resources Corp. (RRC),
Helmerich & Payne Inc. (HP) and Warren
Resources Inc. (WRES). All the players sport a Zacks Rank
#1 (Strong Buy).
HELMERICH&PAYNE (HP): Free Stock Analysis Report
PEDEVCO CORP (PED): Get Free Report
RANGE RESOURCES (RRC): Free Stock Analysis Report
WARREN RSRCS (WRES): Free Stock Analysis Report
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