Mach Natural Resources LP

14201 Wireless Way, Suite 300
Oklahoma City, Oklahoma 73134

August 30, 2023

VIA EDGAR

United States Securities and Exchange Commission

Division of Corporation Finance

Office of Energy & Transportation

100 F Street, NE

Washington, D.C. 20549

Ladies and Gentlemen:

This letter sets forth the responses of Mach Natural Resources LP, a Delaware limited partnership (the “Company”) to the comments of the Staff (the “Staff”) of the U.S. Securities and Exchange Commission (the “Commission”) set forth in your letter, dated July 25, 2023, with respect to the Company’s Draft Registration Statement on Form S-1, confidentially submitted on June 28, 2023, CIK No. 0001980088 (the “Draft Registration Statement”).

Concurrently with the submission of this letter, we are confidentially submitting Confidential Draft Submission No. 2 to Form S-1 (“Submission No. 2”) in response to the Staff’s comments. Capitalized terms used but not otherwise defined herein shall have the meanings ascribed thereto in Submission No. 2. For your convenience, each of the Staff’s comments is reprinted in bold, italicized text below, followed by the Company’s responses thereto.

Draft Registration Statement on Form S-1 Submitted on June 28, 2023

Prospectus Summary

Our Properties, page 2

Response:

The Company acknowledges the Staff’s comment and has revised the disclosure on pages 2 and 119 of Submission No. 2.

Our Business Strategies, page 7

Response:

The Company acknowledges the Staff’s comment and respectfully advises the Staff that the basis for this statement comes from analysis where the Company first selected domestic upstream operators bifurcated into “conventional” and “unconventional” peer companies, which bifurcation was based on management’s understanding and market perception of each individual company’s assets. Within the available conventional group, the Company selected 5 public operators who (i) were onshore focused, (ii) were of similar size to the Company, and (iii) did not have a material merger, acquisition, divestiture, or transaction that altered the presentation of the financials for the year ended December 31, 2022. Within the unconventional group, the Company selected 12 public operators using the same criteria as the conventional group with two changes: (i) the Company removed companies whose operations were focused primarily on natural gas extraction and (ii) the Company added two public companies, which are substantially larger than the Company but are considered industry leaders in efficient operations. Further, the Company notes that several of the companies owned non-upstream business units that served to lower cost of the upstream operations. These business units varied by company but included operations like hydrocarbon marketing, well servicing and electricity generating. Similarly, as we netted the benefit of the Company’s midstream operations out of its upstream costs, the Company treated the non-upstream businesses of the other companies in a similar fashion which largely served to benefit the costs associated with upstream operations. After completing this analysis, the Company was able to extract a per barrel of oil equivalent cost for each peer company in comparison to the Company’s, which such Company amounts were 27% lower on average than the unconventional peer companies and 64% lower on average than the conventional peer companies.

The selected conventional and unconventional peer companies are public companies located in the lower 48 states of the United States and are not limited to companies that operate in the areas in which the Company operates.

Subsequently, we updated our cash operating costs, along with that of the selected conventional and unconventional peer companies, to June 30, 2023 on a last twelve months basis. As a result, we removed one conventional and one unconventional public operator from the selected conventional and unconventional peer companies, which each had a material merger, acquisition, divestiture or transaction that altered the presentation of the financials for the quarter ended June 30, 2023. Following this analysis, the Company was able to calculate a per barrel of oil equivalent cost for each peer company in comparison to the Company’s, resulting in amounts that were 16% lower on average than the unconventional peer companies and 61% lower on average than the conventional peer companies.

Risk Factor Summary, page 9

Response:

The Company acknowledges the Staff’s comment and respectfully advises the Staff that the Company has revised the disclosure on page 11 of Submission No. 2.

Reconciliations of Adjusted EBITDA and Cash Available for Distribution to GAAP Financial Measures, page 22

Response:

The Company acknowledges the Staff’s comment and has revised the disclosure on page 22 of Submission No. 2.

Risk Factors

Declining general economic, business or industry conditions and inflation may have a material adverse effect on our results of operations..., page 41

Response:

The Company acknowledges the Staff’s comment and respectfully advises the Staff that the Company has not experienced any recent inflationary pressures that have materially impacted its operations and thus has not revised its disclosure in Submission No. 2. Additionally, the Company confirms that in future filings it will revise its disclosure if necessary.

Our Cash Distribution Policy and Restrictions on Distribution, page 68

Response:

The Company acknowledges the Staff’s comment and respectfully advises the Staff that the Company is continuing to negotiate the terms of its New Credit Facility and will summarize its material terms in a future amendment to the Registration Statement. However, we do not expect the financial tests and covenants in the New Credit Facility to have impacted the cash distributions that we could have made during the pro forma periods for the year ended December 31, 2022, or the twelve months ended June 30, 2023, and will expand the disclosure at a future date if these covenants may threaten to impact the forecasted period.

Business and Properties

Proved Undeveloped Reserves (PUDs), page 116

Please expand your explanation of the changes associated with the development plan, quantity estimates and forecast revisions to separately identify and quantify each contributing factor, including offsetting factors, so the change is fully reconciled. Refer to the disclosure requirements in Item 1203(b) of Regulation S-K. This comment also applies to the explanation of the changes in total proved reserves that occurred due to revisions and for each period presented on pages F-5 to F-6, F-32, F-56 and F-80, respectively. Refer to the disclosure requirements in FASB ASC 932-235-50-5.

Response:

The Company acknowledges the Staff’s comment and has revised the disclosure on pages 129, F-34, F-77, F-78, and F-119 of Submission No. 2.

Developed and Undeveloped Acreage

Undeveloped Acreage Expirations, page 120

Response:

The Company acknowledges the Staff’s comment and respectfully advises the Staff that there are not material quantities of net proved undeveloped reserves related to such locations. The Company has included revised disclosure on page 133 of Submission No. 2.

Drilling Results, page 120

Response:

The Company acknowledges the Staff’s comment and has revised the disclosure on page 134 of Submission No. 2.

Response:

The Company acknowledges the Staff’s comment and has revised the disclosure on pages 134 of Submission No. 2.

Executive Compensation and Other Information

Equity Incentives, page 139

Response:

The Company acknowledges the Staff’s comment and respectfully advises the Staff that it does not believe that the material terms of the Class B Units, the significance of vesting and who will be responsible for any distributions made in connection with the Class B Units are material to investors in our common units since, at the time the Class B Units vest and the offering is consummated, the Class B Units will be exchanged for their pro rata entitlements in the common units of the public company. At that time, the Class B Units will cease to exist, the vesting will no longer apply, and the holders of the Class B Units will own their respective share of common units in the public company and will be ongoing employees of Mach Resources LLC. Additionally, as such, the Company has not included the agreements governing the terms of the incentive units as an exhibit to Submission No. 2.

Certain Relationships and Related Party Transactions

Agreements with Affiliates in Connection with the Reorganization Transactions, page 146

Response:

The Company acknowledges the Staff’s comment and has revised the disclosure on page 161 of Submission No. 2 to expand the material terms of the Contribution Agreement. Additionally, the Company respectfully advises the Staff that the Company is continuing to negotiate the terms of the Contribution Agreement and Management Services Agreement and will further summarize the material terms of these agreements in a future amendment to the Registration Statement.

Appendix B

Glossary of Oil and Gas Terms and Other Terms, page B-1

Response:

The Company acknowledges the Staff’s comment and has revised the disclosure on page B-2 of Submission No. 2.

Pro Forma Financial Statements, page F-2

Tell us how you determined that BCE-Mach III was the Predecessor for accounting and reporting purposes.

Provide to us your accounting analysis that supports your conclusion that none of the contributed entities are under common control, including a detailed organizational diagram depicting the ownership structure and related ownership percentages of the contributed entities both before and after the Reorganization Transactions and the offering. Please refer to ASC 805-50 for guidance including the examples in ASC 805-50-15-6.

If your analysis responding to the above comment still concludes no common control, then tell us how you have considered the guidance in ASC 805-50-05-7 and ASC 805-50- 30-7 pertaining to the formation of a master limited partnership in concluding that a new basis of accounting was appropriate for BCE-Mach and BCE-Mach II.

Response:

The Company acknowledges the Staff’s comment and respectfully advises the Staff that, in determining that BCE-Mach III was the predecessor for accounting and reporting purposes, the Company considered the guidance in ASC 805-10-55-15 that notes that a new entity formed to effect a business combination is not necessarily the acquirer. If a new entity is formed to issue equity interests to effect a business combination, one of the combining entities that existed before the business combination shall be identified as the acquirer by applying the guidance in paragraphs ASC 805-10-55-10 through 55-14.

Mach Natural Resources LP (“MNR LP”) was formed for the sole purpose of receiving the transfer of equity interests in BCE-Mach LLC (“Mach I”), BCE-Mach II LLC (“Mach II”), and BCE-Mach III LLC (“Mach III”) and has no other operations. As such, Mach Natural Resources is not a substantive entity in the transaction in relation to the identification of the accounting acquirer. Additionally, no common parent entity exists under the VIE model that controls or is primary beneficiary of all three entities.

In applying the guidance of ASC 805-10-55-13 noting that the acquirer usually is the combining entity whose relative size (measured in, for example, assets, revenues, or earnings) is significantly larger than that of the other combining entity or entities, the Company reviewed the relevant financial data below to determine the accounting acquirer:

Based on the above, the Company noted that Mach III is significantly larger than the other Mach Companies by all relevant measures, listed above. Upon transfer of equity interests into MNR LP, the previous owners of Mach III will have the largest ownership in MNR LP. While Mach I was formed first, Mach III has what can be considered a meaningful operating history over the past 3 years. As such, Mach III will be considered the accounting acquirer for this transaction based on the above application of the guidance in ASC 805.

The Company reviewed the organizational structure of the individual entities to determine if common control exists between Mach I, Mach II, and Mach III. A detailed organizational diagram depicting the ownership structure and related ownership percentages of the contributed entities before the Reorganization Transactions and the offering has been provided to the Staff in the Supplemental Letter submitted contemporaneously with this letter. The Company respectfully advises the Staff that it has not included an ownership structure and related ownership percentages after the Reorganization Transactions and the offering as the post-IPO upstairs ownership will look similar to this structure, but BCE Mach Holdings I, BCE Mach Holdings II and BCE Mach Holdings III will own equity interests through BCE-Mach Aggregator LLC (to the extent such membership interests are not already held by BCE-Mach Aggregator LLC). The exact ownership percentages of the three BCE Mach Holdings entities and Mach Resources cannot be determined at this time because the ownership percentages will be calculated by running the waterfall in the various fund documents by using the IPO price.

The Company notes entities under common control exist in the following situations:

In review of the organizational structure prior to the re-organization, the Company noted that no individual or entity owns more than 50% of the voting ownership interest across each of Mach I, Mach II, and Mach III. The entities are not held by immediate family members, and no written agreement exists from a group of shareholders for them to vote their shares in concert. Additionally, as none of the entities are VIEs, no common control exists from this designation. As none of the common control objectives have been satisfied, the Company determined the Mach I, Mach II, and Mach III are not under common control.

The Company also considered the guidance regarding transactions involving common ownership where the shareholders would have identical ownership before and after the transaction, which would be accounted for in the same way as if they were under common control. However, the ownership structure pre/post re-organization will not be identical, therefore it is inappropriate to use the entities carrying values in the reorganization.

The Company also considered the guidance in ASC 805-50-05-7 and ASC 805-50-30-7, noting that a rollup, a dropdown, a rollout, and a reorganization are all transactions that create a master limited partnership where a new basis of accounting is not appropriate. The Company reviewed the circumstances of the proposed transaction and considered each transaction type:

As each of the four transactions outlined by the guidance is not applicable to the proposed transaction, the Company determined a new basis of accounting was appropriate for BCE-Mach and BCE-Mach II.

Response:

The Company acknowledges the Staff’s comment and respectfully advises the Staff that the Company is continuing to negotiate the terms of the new MSA, and that once the new MSA is finalized, the Company will inform the Staff whether there are significant differences in the fee or cost structure of the new MSA compared to the existing MSA and reflect any significant differences in the pro forma adjustments in future filings.

Mach Natural Resources LP

Notes to Pro Forma Financial Statements

3. Supplementary Disclosure for Oil and Gas Producing Activities, page F-5

Response:

The Company acknowledges the Staff’s comment and has revised the disclosure on page F-7 of Submission No. 2.

Response:

The Company acknowledges the Staff’s comment and respectfully advises the Staff that the shut-in well investments are the cost associated with the plugging and abandonment process and therefore have no associated volumes. The Company has revised Exhibits 99.1, 99.2 and 99.3.

Please expand the disclosure in Exhibit 99.3 to further clarify, if true, that these revenues are limited to BCE-Mach III’s direct ownership interests in the processed volumes and excludes any revenues resulting from volumes processed on behalf of other parties. Refer to the requirements in Rule 4-10(a)(26) of Regulation S-X.

Response:

The Company acknowledges the Staff’s comment and respectfully advises the Staff that the BCE-Mach III midstream revenues are associated with its ownership volumes only. The Company has revised Exhibit 99.3.

Response:

The Company acknowledges the Staff’s comment and has provided a copy of the requested communications in the Supplemental Letter submitted contemporaneously with this letter.

We respectfully request the Staff’s assistance in completing the review of Submission No. 2 as soon as possible. Should you have any questions relating to any of the foregoing, please contact Julian J. Seiguer or Michael W. Rigdon at (713) 836-3334 or (713) 836-3647, respectively.

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