Mach Natural Resources LP Reports Strong Q3 2023 Earnings and Upcoming Acquisition
Mach Natural Resources LP (NYSE:MNR) announces a net income of $94 million for Q3 2023.
Sales volumes averaged 66,280 Boe per day with a strong cash flow and controlled costs.
The anticipated Paloma Acquisition is expected to close on December 29, 2023, significantly boosting reserves and production.
First quarterly cash distribution as a public company to be announced in February 2024.
On December 6, 2023, Mach Natural Resources LP (NYSE:MNR) released its 8-K filing, detailing its financial and operational results for the third quarter of 2023. The company reported a net income of $94 million and an Adjusted EBITDA of $140 million for the quarter. These figures are part of a pro forma basis to reflect the combined results of Mach and its predecessors, BCE-Mach III LLC, BCE-Mach LLC, and BCE-Mach II LLC, following a business combination that occurred post the third quarter.
Operational and Financial Highlights
Mach's CEO, Tom L. Ward, expressed satisfaction with the quarter's performance, stating,
In the third quarter, we generated strong cash flow from better-than-expected production volumes while controlling costs across all areas of our business."
The company's sales volumes during the quarter averaged 66,280 Boe per day, with a composition of 28% oil, 54% natural gas, and 18% NGLs. Mach also reported an average realized price of $80.88 per barrel of crude oil, $23.47 per barrel of NGLs, and $2.36 per Mcf of natural gas.
Upcoming Paloma Acquisition
The Paloma Acquisition, set to close on December 29, 2023, is expected to add 75 million Boe of proved developed producing (PDP) reserves and approximately 32,000 Boe per day in production. CEO Ward commented on the acquisition,
Our most recent acquisition from Paloma is accretive to both total cash available for distribution, as well as expected cash distribution per unit."
The company is actively adding to its existing hedges in anticipation of the acquisition.
Financial Statements Summary
The unaudited financial statements of BCE-Mach III LLC, Mach's predecessor, show a solid financial position with total assets of $1,054,783,000 as of September 30, 2023. The balance sheet reflects an increase in cash and cash equivalents to $58,737,000 from $29,417,000 at the end of 2022. The income statement reveals a net income of $83,485,000 for the three months ended September 30, 2023, and $252,988,000 for the nine months ended the same date.
Pro Forma Financials and Future Guidance
The pro forma financials, which combine the operations of Mach and its predecessors, show a net income of $93,925,000 for the three months ended September 30, 2023. The company plans to provide full-year 2024 guidance in February 2024 and expects to announce its first quarterly cash distribution based on Q4 2023 results in mid-February 2024, with distribution to unitholders in mid-March 2024.
Mach Natural Resources LP is poised for a strong finish to 2023 and an even stronger start to 2024, with significant acquisitions and a focus on maximizing cash distributions to unitholders. Investors and industry analysts will be watching closely as the company continues to execute on its strategic objectives and capitalizes on its operational efficiencies.
Explore the complete 8-K earnings release (here) from Mach Natural Resources LP for further details.
This article first appeared on GuruFocus.
