Northern Oil and Gas, Inc. announced that it has entered into an agreement to acquire properties in the Midland Basin.
NOG has entered into a definitive agreement to acquire non-operated interests in the Midland Basin for a purchase price of $110 million in cash, subject to typical closing adjustments. NOG expects to fund the acquisition with cash on hand, operating free cash flow and borrowings under NOG’s revolving credit facility.
At closing, production on the assets is expected to be greater than 1,600 Boe per day (2-stream, ~87% oil) and NOG expects average production of over 1,800 Boe per day over the next twelve months post-closing (2-stream, ~86% oil). NOG expects less than $5 million of capital expenditures to be incurred post-closing in 2022 and does not anticipate revising 2022 capital expenditure guidance for the acquisition. These high-quality properties have operating costs lower than NOG’s corporate average.
The acquired assets are located in Howard County, Texas and include approximately 1,600 acres, 6.4 net producing wells, 1.6 net wells-in-process and approximately 8 net undeveloped locations. Substantially all of the assets are operated by SM Energy.
The effective date for the transaction is August 1, 2022, and NOG expects to close the transaction in October 2022. The obligations of the parties to complete the transactions contemplated by the purchase agreement are subject to the satisfaction or waiver of customary closing conditions.
