NOG to acquire certain Delaware Basin assets for $130m

Northern Oil and Gas (NOG) has signed a definitive agreement to acquire certain non-operated interests in the northern part of the Delaware Basin, US for $130m in cash from an undisclosed seller.

The assets included in the deal are located in Lea and Eddy Counties in New Mexico and Loving and Winkler Counties in Texas.

According to Northern Oil and Gas, the assets cover nearly 2,100 acres of area.

The deal gives the company 5.3 net producing wells, 2.1 net wells-in-process, and nearly 17.2 net undeveloped locations.

The assets are primarily operated by Mewbourne Oil. Other operators are Coterra and Permian Resources.

Northern Oil and Gas CEO Nick O’Grady said: “NOG continues to press its advantage as a well-capitalized, reliable and consistent purchaser of high-quality non-operated properties,

“More importantly, NOG’s technical team continues to underwrite for returns with precision and focus on the best assets available in the marketplace today.”

Upon closing of the transaction, the company gains an additional production of around 2,500 barrels of oil equivalent (Boe) per day for 2023. Of this, 68% will be oil.

The company estimates around $25m in capital expenditures for the assets in 2023.

Northern Oil and Gas president Adam Dirlam said: “This transaction lies squarely in NOG’s fairway on a number of levels. The Assets contain high-quality, low breakeven development that is leveraged to some of NOG’s top operating partners, as our investors have come to expect.”

The transaction is expected to close in December 2022, subject to the satisfaction of certain customary conditions.

Kirkland & Ellis served as legal advisor for Northern Oil and Gas on the transaction, while Wells Fargo Securities is the financial advisor.

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