Northern Oil and Gas (NOG) has agreed to acquire certain oil and gas assets in the Northern Delaware Basin in the US from privately held oil and gas company Alpha Energy Partners.

The deal consideration includes an initial $157.5m in cash, as well as an additional cash consideration based on average front month NYMEX WTI pricing during the first half of next year.

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Under the agreement, NOG will acquire the assets located in the Lea and Eddy counties, New Mexico, and Loving County, Texas.

These include approximately 2,800 acres, 9.6 net producing wells, 2.8 net AFEs and wells-in-process, and approximately 21.2 net undeveloped locations.

Over the next three years, the assets are expected have strong growth and free cash flow profile, with approximately $32m in average annual capital spending.

The assets are expected to have a production rate of more than 4,000 barrels of oil equivalent per day in 2024 and 2025.

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NOG CEO Nick O’Grady said: “NOG continues to execute on creating shareholder value as a proven, reliable, and disciplined consolidator of working interests.

“These assets are squarely in our core focus area and are poised to deliver substantial growth over the coming years while delivering significant cash flow to bolster shareholder returns.”

NOG plans to finance the acquisition with operating free cash flow, cash on hand, and borrowings under its revolving credit facility.

NOG president Adam Dirlam said: “The Northern Delaware Basin continues to be a key target for our consolidation efforts.

“This asset has some of the highest quality, lowest-cost inventory we have acquired, and is leveraged to NOG’s top operator in the Permian.”