Presidio Buys Canyon Creek Assets for $83M

Presidio Production Company is set to significantly bolster its operational reach with the execution of agreements to acquire the Canyon Creek assets for approximately $83 million. This strategic move marks Presidio's inaugural acquisition as a publicly traded entity and is anticipated to close early in the third quarter of 2026, pending standard regulatory approvals.

The transaction's financial structure involves a combination of cash and equity. Sellers, including entities controlled by Vortus Investments and other parties, will receive roughly 2.17 million shares of Presidio's stock, alongside a cash component of $60 million. This cash infusion will be sourced from Presidio's existing cash reserves and its substantial $1 billion Goldman Sachs ABS Warehouse Facility, underscoring the company's robust financing capabilities.

This acquisition is designed to propel Presidio into the prolific Arkoma Basin, a region experiencing renewed interest due to its rich natural gas reserves. The strategy aligns with Presidio's established "land-and-expand" approach, which prioritizes the acquisition of producing wells rather than engaging in new drilling activities. This focus on existing infrastructure allows for immediate cash flow generation and operational optimization.

The acquired Canyon Creek assets currently boast approximately 55 producing wells, contributing about 21.4 million cubic feet of gas equivalent per day (MMcfe/d) as of April 2026. The production mix is predominantly natural gas, accounting for roughly 70%, with the remaining 30% comprising valuable natural gas liquids. These reserves are estimated at approximately 100 billion cubic feet of gas equivalent (Bcfe), with a Proved Developed Producing (PDP) PV-10 valuation nearing $100 million.

Presidio anticipates substantial financial benefits from this acquisition. Projections indicate year-one free cash flow yields and levered equity returns are expected to surpass 20%. Furthermore, the company plans to leverage the enhanced cash flow to increase its anticipated annual dividend payout from $1.35 to $1.50 per share, signaling confidence in its growth trajectory and commitment to shareholder returns. This move is particularly noteworthy in a market where energy companies are increasingly scrutinized for their capital discipline and return on investment.

The acquisition's strategic importance is highlighted by Presidio's Co-CEOs, Will Ulrich and Chris Hammack. Ulrich emphasized the deal as a "key step in our growth trajectory," providing a "high-quality foothold in an adjacent basin" that complements their consolidation strategy. Hammack added that the company is prepared to implement "operational efficiency improvements and production enhancements" from day one, aiming to maximize the value of the acquired properties. Opportune Partners served as the financial advisor to Presidio, with Latham & Watkins providing legal counsel.