Newpek divested all of its assets in Texas

ALFA announced that its subsidiary Newpek LLC (Newpek) divested all of its assets in Texas, including wells and leases in the Eagle Ford Shale (EFS) and Edwards Shale (Edwards) formations.

Newpek transferred its Texas assets to Ensign Operang LLC (Ensign) and Reliance Eagleford Upstream Holding LP (Reliance) in exchange for the full cancellation of its obligations in operating contracts and their partnership.

At the close of the second quarter of 2020, Newpek reported 591 wells connected to sales at EFS and Edwards.

This transaction has an implicit value of 88 million dollars for Newpek, as a result of the cancellation of obligations.

ALFA will recognize an extraordinary profit of 58 million dollars in the Flow of the third quarter of 2020.

Details of the deal were not disclosed.

Newpek

In line with ALFA’s strategy to divest its Oil and Gas assets outside of Mexico, Newpek also closed its administrative offices in Irving, Texas and moved the remaining functions to Monterrey, Mexico.

This transaction is part of the transformation plan announced by ALFA, which seeks to unleash its great value potential through a gradual and orderly process towards the total independence of its businesses; unlike the current structure of a conglomerate.

Conglomerate

ALFA manages a diversified business portfolio:

• Alpek, one of the world’s largest producers of polyester (PTA, PET and fibers) and leader in the Mexican market for polypropylene, expandable polystyrene and caprolactam.
• Sigma, a leading multinational company in the food industry, focused on the production, commercialization and distribution of products, through recognized brands in Mexico, Europe, the United States and Latin America.
• Nemak, a leading provider of innovative lightweighting solutions for the global automotive industry, specializing in the development and manufacture of aluminum powertrain components, structural components and electric vehicles.
• Axtel, an Information and Communication Technologies (ICT) company that serves the business and government markets in Mexico.
• Newpek, a company that operates in the hydrocarbon industry in the United States and Mexico.

In 2019, ALFA generated income of 337,750 million pesos (US $ 17,538 million) and EBITDA of 44,280 million pesos (US $ 2,298 million).