Vital Energy, in a partnership with Northern Oil and Gas (NOG), has announced the acquisition of Point Energy Partners' (Point) shale assets in a deal valued at $1.1bn.
Vital will take ownership of 80% of Point's assets, while NOG will acquire the remaining 20%.
This acquisition is expected to significantly enhance Vital's inventory locations and oil production capacity.
It will add 68 gross inventory locations (49 net) to Vital's portfolio, with an estimated average breakeven oil price of $47 per barrel NYMEX WTI.
The acquired assets encompass approximately 16,300 net acres and net production of around 30,000 barrels of oil equivalent per day (67% oil).
Over the past 15 months, Vital has been actively expanding its presence in the Delaware Basin, which complements its existing leasehold in the Midland Basin.
The new acquisition will boost the company's Delaware Basin position by roughly 25% to 84,000 net acres, meaning the Delaware Basin will account for more than one-third of Vital's oil production.
NOG's share of the assets, primarily located in Ward County, Texas, includes around 4,000 net leasehold and mineral acres, 26.4 net producing wells, 1.6 net wells-in-process and approximately 12.1 low-breakeven net undeveloped locations.
After the transaction closes, Vital will operate the assets, while NOG will collaborate in development through cooperation and joint operating agreements.
Vital Energy president and CEO Jason Pigott said: “This bolt-on is a great fit for us, adding high-value inventory and production in the heart of our core operating areas. Furthermore, it expands our growing Delaware Basin position and balances our Permian operations.
“We expect to continue to demonstrate our ability to capture, integrate and create substantial value on acquired assets through optimised development plans, lower capital costs and proven operating practices, resulting in higher future cash flows.”
The acquisition is on track to be finalised by the end of the third quarter of 2024, with an effective date of 1 April 2024, pending the satisfaction of customary closing conditions.
This deal follows Vital Energy's September announcement that it had acquired three smaller oil and gas producers for $1.17bn and its May partnership to purchase Forge Energy in the Midland portion of the Permian Basin.
