Clayton Williams Energy, Inc. (NASDAQ:CWEI) announced that on March 14, 2012, its wholly owned subsidiary, Southwest Royalties, Inc., completed the previously announced mergers of each of the 24 limited partnerships of which SWR is the general partner ('SWR Partnerships') into SWR, with SWR continuing as the surviving entity in the mergers. At the effective time of the mergers, all of the units representing limited partnership interests in the SWR Partnerships, other than those held by SWR, were converted into the right to receive cash. SWR did not receive any cash payment for its partnership interests in the SWR Partnerships. However, as a result of the mergers, SWR acquired 100% of the assets and liabilities of the SWR Partnerships. SWR paid aggregate merger consideration of $38.6 million.
SWR obtained the funds to finance the aggregate merger consideration by conveying a volumetric production payment in the form of a term overriding royalty interest to a third party covering approximately 752,000 barrels of oil equivalents from specified properties acquired in the mergers.
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