Northern Oil & Gas and SM Energy, which are acquiring Uinta Basin E&P XCL Resources, will acquire additional assets in the basin with the purchase of Altamont Energy, which XCL had been trying to buy. (Source: Shutterstock, Northern Oil & Gas, SM Energy)
Northern Oil & Gas (NOG) and partner SM Energy are adding more interests in the Uinta Basin in a follow up deal to the companies’ pending acquisition of XCL Resources.
On Aug. 6, NOG said that Altamont Energy, previously under contract to be purchased by XCL Resources, was offered to NOG and SM under a right of first refusal in connection with their proposed XCL acquisition.
As a result, NOG will acquire the 20% stake in Altamont for a purchase price, net to NOG, of $17.5 million cash, subject to customary closing adjustments.
The acquired assets are located primarily in Uintah and Duchesne counties, Utah, and include approximately 6,500 net acres. NOG estimates the Altamont stake will add approximately 18 net undeveloped locations on the properties and ~250 boe/d of production.
After closing, SM will be the operator of substantially all of the Altamont assets, with NOG participating in development pursuant to cooperation and joint development agreements entered in connection with the XCL asset acquisition.
The arrangement mirrors SM and NOG’s pending acquisition of XCL Resources in a deal valued at $2.55 billion. NOG’s part of that deal will also see it acquire a 20% undivided stake in XCL valued at $510 million. SM will be the operator of XCL’s assets.
“We are excited to execute the option to purchase additional Uinta assets under our Area of Mutual Interest agreement with SM. The Altamont assets increase our Uinta footprint substantially and are a testament to the benefits of the joint venture structures we have pursued in recent years,” O’Grady said in a press release. “This transaction grows our estimated Uinta inventory by nearly 20%, and given the 70% increase in acreage, provides significant future exploration potential for a minimal cash outlay.”
NOG said it expects to close the Altamont transaction simultaneously with the XCL transaction in early fourth-quarter 2024.
RBC Capital Markets served as financial adviser to NOG for the XCL and Altamont acquisitions.
Kirkland & Ellis LLP is serving as legal counsel to NOG.
Recommended Reading
The ABCs of ABS: Financing Technique Shows Flexibility and Promise
2024-07-29 - As the number of ABS deals has grown, so have investors’ confidence with the asset and the types of deals they are willing to underwrite.
Solaris Stock Jumps 40% On $200MM Acquisition of Distributed Power Provider
2024-07-11 - With the acquisition of distributed power provider Mobile Energy Rentals, oilfield services player Solaris sees opportunity to grow in industries outside of the oil patch—data centers, in particular.
Archrock Offers Common Stock to Help Pay for TOPS Transaction
2024-07-23 - Archrock, which agreed to buy Total Operations and Production Services (TOPS) in a cash-and-stock transaction, said it will offer 11 million shares of its common stock at $21 per share.
The ABCs of ABS: Financing Technique Shows Flexibility and Promise
2024-07-29 - As the number of ABS deals has grown, so have investors’ confidence with the asset and the types of deals they are willing to underwrite.
Cibolo Energy Closes Fund Aimed at Upstream, Midstream Growth
2024-09-10 - Cibolo Energy Management LLC closed its second fund, Cibolo Energy Partners II LP, meant to boost middle market upstream and midstream companies’ growth with development capital.
Comments
Add new comment
This conversation is moderated according to Hart Energy community rules. Please read the rules before joining the discussion. If you’re experiencing any technical problems, please contact our customer care team.