VTX Energy Partners, the U.S. upstream arm of Swiss-based Vitol, has closed an acquisition of 35,000 net leasehold acres in the Delaware Basin as the company hunts for at least $1 billion in deals in the Lower 48.
VTX Energy said on March 24 that it completed the acquisition of Delaware Basin Resources LLC, an E&P backed by Stellus Capital Management, for an undisclosed amount.
Andrew Dittmar, research director at Enverus Intelligence, told Hart Energy that based on the size of the Delaware Basin asset, the transaction was likely in the range of $1.5 billion to $2 billion.
The deal includes 46,000 surface acres in Reeves and Pecos counties, Texas, and currently averages production of approximately 40,000 boe/d, VTX Energy said on March 23. In January, VTX said the deal also included associated surface and water businesses.
The deal is the latest in a number of high-profile acquisitions by international companies willing to invest in shale even as domestic buyers and sellers remain sidelined.
VTX Energy Partners is the successor company to Austin, Texas-based ATX Energy Partners, which partnered with Vitol in 2022 to acquire, develop and operate large-scale upstream assets in the U.S. Lower 48.
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The company is led by CEO Gene Shepherd, the founder and former president and CEO Brigham Resources LLC, which in 2016 was purchased by Diamondback Energy for $2.4 billion.
“This is the starting step of our plan to build a significant producer in the Delaware Basin,” Shepherd said in a news release. “We are excited to have closed our first acquisition since the launch of our partnership with Vitol. We look forward to growing our asset position, initially focused in the southern Delaware Basin.”
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VTX is interested in buying more assets in the Lower 48 and in the Permian Basin, in particular. The company is seeking out $1 billion in deals to build up its U.S. upstream position.
The Delaware Basin deal wasn’t the first U.S. upstream investment for Vitol, one of the world’s largest independent oil traders. The company previously established Vencer Energy, which debuted in 2021 with the acquisition of Hunt Oil’s Midland Basin footprint.
“This represents our second scale acquisition in the U.S. shale patch,” Vitol’s Head of Americas Ben Marshall said of the Delaware Basin deal. “We believe the investment opportunity in upstream will remain attractive and are hopeful the VTX team can leverage our partnership to target new investment opportunities and build VTX into a sizeable producer.”
U.S. shale assets have seen renewed interest from international players so far this year, Dittmar said.
Canadian E&P Baytex Energy announced plans to acquire Eagle Ford pure-play Ranger Oil Corp. in a $2.5 billion deal. The acquisition would materially boost the Calgary-based company’s footprint in South Texas, adding 162,000 net acres and between 67,000 boe/d to 70,000 boe/d of production.
Chesapeake Energy Corp. reached an agreement to sell a portion of its Eagle Ford position to U.K.-based INEOS Energy for $1.4 billion. The deal includes about 172,000 net acres and 2,300 wells in the black oil portion of the Eagle Ford.
“It’s kind of a combination, I think, of U.S. shale companies being pretty cautious in terms of what they’re willing to pay for deals and where they’re willing to go shopping still,” Dittmar said. “And then, if you look at the global opportunity stack for buying oil and gas assets, obviously the U.S. still looks really attractive – despite some of these shale plays hitting the more mature part of their life cycle.”
J.P. Morgan Securities LLC acted as financing adviser and Vinson & Elkins LLP acted as legal advisor to VTX.
Kirkland & Ellis LLP provided legal counsel to Delaware Basin Resources on its sale to VTX Energy.
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