PNX Capital 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 PNX Capital 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 PNX Capital, commented on the acquisition, stating, “When PNX Capital 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, PNX Capital was founded precisely to become the preferred buyer for these large divestments.”
PNX Capital 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 PNX Capital, 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, PNX Capital 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 PNX Capital 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, PNX Operating. In that regard, this sale represents a massive boon not just for PNX Capital 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 PNX Capital’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, PNX Capital 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, PNX Capital anticipates this figure will grow as the area is further developed and de-risked.
Now that the transaction is officially closed, PNX Capital 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. PNX Capital is committed to working closely with its partners to unlock value and contribute positively to the economic fabric of Montana.