Houston-based Oasis Petroleum Inc. announced that it will sell its entire Permian Basin position in multiple deals for a total of $481MM. The company's announcement did not disclose the buyer or buyers of the Permian assets.
Two small deals have already closed, and the primary deal is expected to close around June 30. Oasis' total proceeds include $406 million at closing and up to three $25 million annual contingent payments in 2023, 2024 and 2025 if the West Texas Intermediate oil price averages over $60 per barrel in each respective calendar year.
"The decision to exit the Permian Basin while building scale in the Williston Basin is fundamentally based on aligning company resources with our core competitive strengths and strategic focus of building a sustainable enterprise which generates significant free cash flow for the benefit of the Company and shareholders," said Danny Brown, Oasis' CEO.
"The successful conclusion of our Permian divestiture process allows us to bring substantial value forward from an asset that was difficult to scale, strengthens our balance sheet from already peer-leading levels, and allows us to focus our attention on driving significant value from our world-class Williston acreage position, where we see great upside opportunity and long-term running room. The combined Williston and Permian transactions are highly accretive, position Oasis to take advantage of expanded scale, result in very low leverage, and demonstrate our commitment to shareholders.
Brown just came on board as CEO last month after spending 23 years with Anadarko Petroleum Corp. and a predecessor firm. At Oasis, Brown replaced Douglas Brooks, who remains Oasis’ board chair. Brooks stepped in as CEO in December while the company searched for a permanent replacement for Thomas Nusz. Nusz was one of Oasis' co-founders and the CEO who led the company through its bankruptcy in 2020, which it emerged from in November with new ownership, a new board of directors and new funding.
J.P. Morgan Securities LLC acted as strategic and financial adviser in the primary Permian divestiture process, and McDermott Will & Emery acted as legal adviser.
