Vital Energy signs $1.16bn deal to buy Permian Basin assets

The deal will add around 53,000 net acres and proved reserves of around 248 million barrels of oil equivalent.

Independent energy company Vital Energy has signed three definitive agreements to scale operations in the Permian Basin.

The agreements were signed with affiliates of Henry Energy and Henry Resources (Henry), Tall City Property Holdings III (Tall City) and Maple Energy Holdings (Maple).

Subject to customary losing price adjustments, the combined value of the transaction is approximately $1.16bn, which comprises cash and stock.

Vital Energy said the deal will add around 53,000 net acres and proved reserves of around 248 million barrels of oil equivalent (mboe), 44% oil, as per last year’s estimates.

Following the acquisitions, Vital Energy’s current production is expected to increase by approximately 35mboe per day (mboed) (50% oil).

On a pro forma basis, Vital Energy will have around 250,000 net acres and a projected average full-year 2024 total production of roughly 112mboed.

Additionally, the deals bring about 150 gross high-value locations, with the average WTI crude oil break-even price being around $50 per barrel, Vital Energy added.

Vital Energy president and CEO Jason Pigott said: “These transactions increase our scale in the Permian and fit with our proven strategy of creating value through disciplined acquisitions.

“We have demonstrated our ability to effectively consolidate Permian assets and identify sustainable synergies to lower costs, improve margins and enhance free cash flow. These acquisitions will significantly strengthen our free cash flow outlook and enable us to rapidly deliver our balance sheet.”

The transactions are expected to close in the third quarter of 2023.

In May this year, Vital Energy signed a $540m deal with Forge Energy II Delaware to bolster its presence in the Permian basin and Delaware Basin.

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