Vital Energy is raising its outlook on oil and gas production and capital spending after completing a sizable acquisition in the Permian Basin, adding approximately 24,000 net acres and 100 gross drilling locations in Texas. (Source: Shutterstock)
Vital Energy is boosting its full-year production and capital spending guidance after closing a deal in the Permian Basin.
Vital, based in Tulsa, Oklahoma, closed its acquisition of Forge Energy II Delaware LLC on June 30, the company said in a July 11 news release. Vital payed a $391.6 million cash consideration for 70% of Forge’s assets, after closing price adjustments.
Vital acquired Forge’s assets in a joint deal with Minnesota-based Northern Oil & Gas Inc.—Vital, which will operate the Forge assets, acquired 70%, while NOG purchased the remaining 30% for $167.9 million in cash.
The deal adds around 24,000 net acres and another 100 gross drilling locations in Pecos, Reeves and Ward counties, Texas. Acquiring Forge grows Vital’s Permian footprint up to around 198,000 net acres.
Vital is raising its oil and gas production outlook after both completing the Forge acquisition and the company outperforming its own production expectations during the first half of the year.
The company anticipates total production to range between 82,000 boe/d and 86,000 boe/d during 2023—up from Vital’s original guidance of between 76,000 boe/d and 80,000 boe/d. Crude oil production is expected to range between 40,000 bbl/d and 43,000 bbl/d, up from guidance of 36,300 bbl/d to 39,300 bbl/d.
During the second half of 2023, Vital plans to operate a single drilling rig and bring five wells online on the Delaware Basin acreage acquired from Forge.
Vital has set aside another $50 million in its capital spending budget to invest in developing the acquired Forge assets.
The E&P now expects its capital spend to range between $675 million and $725 million for the full year, up from Vital’s original guidance of between $625 million and $675 million.
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