HighPeak Energy, Inc. Announces Acquisition of Howard County Properties Principally in its Signal Peak Area from Hannathon Petroleum and Other Sellers

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[{"type":"text","content":"FORT WORTH, Texas, April 27, 2022 (GLOBE NEWSWIRE) -- HighPeak Energy, Inc. (“HighPeak” or the “Company”) (NASDAQ: HPK) announced today that it has entered into an agreement to acquire the Howard County assets of Hannathon Petroleum, LLC (“Hannathon”) and other non-operated working interest owners. HighPeak currently owns non-operated working interest in approximately 60% of the acquired gross acreage position. Purchase consideration due to the sellers, subject to customary closing adjustments, is comprised of $255 million in cash and approximately 3.78 million shares of HighPeak’s common stock. The cash portion of the consideration is expected to be funded with cash on hand and borrowings under the Company’s revolving credit facility. In connection with the close of this transaction and the annual Spring redetermination, HighPeak expects to receive consents from its bank group to substantially increase the aggregate elected commitments and borrowing base on its revolving credit facility. The transaction has an effective date of January 1, 2022 and is expected to close early in the third quarter of 2022. The Company’s second strategic acquisition this year shows HighPeak’s willingness to enter the market for accretive bolt-on opportunities and adds further momentum to HighPeak’s growth strategy. Acquisition highlights include: Accelerated Development Runway – ability to leverage substantial infrastructure-in-place to accelerate pace of Signal Peak development; HighPeak expects to maintain Hannathon’s existing one rig drilling program on the acquired acreage through 2022Increased Scale and Depth of Inventory – bolt-on acquisition adds approximately 150 net locations and 18,600 net acres largely contiguous to the Company’s existing Signal Peak position with 2022E average production of 5 MBoe/d (85% liquids)Improved Cash Flow Generation – acquired at approximately a 3.0x multiple on 2022E EBITDAX with further uplift from synergies estimated at $70 million on a present value basis Jack Hightower, HighPeak Chairman and Chief Executive Officer, commented, “We began our strategic expansion in the Signal Peak area in August 2021 by acquiring a non-operated ownership interest in these assets. Acquiring the balance of the working interest will bolster our drilling potential in the area and give us control of significant infrastructure to ...

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