WPX Energy has agreed to acquire Delaware basin operator Felix Energy for $2.5 billion.
Felix has some 1,500 gross undeveloped locations at predominately 2-mile lateral lengths in the eastern portion of the basin, with expected production of 60,000 boe/d (70% oil) at the time of closing, expected in second-quarter 2020, subject to conditions and WPX shareholder approval.
The purchase price consists of $900 million cash, subject to closing adjustments, and $1.6 billion in WPX stock issued to the seller. WPX plans to fund the cash portion through issuance of $900 million of senior notes on an opportunistic basis. WPX also has obtained committed financing from Barclays in connection with the transaction and has access to a $1.5 billion revolving credit facility.
With the acquisition, WPX gains about 1,500 gross drillable locations (at predominately 2-mile lateral lengths) that compete with the returns from its existing position in the core Stateline area.
Felix has 58,500 net acres in an over-pressured, oily portion of the basin with six productive benches. Approximately 25 additional wells are required to hold nearly all Wolfcamp and Third Bone Springs rights, with about half of those wells expected to be drilled in 2020, WPX said.
Felix’s recent multi-well pads with at least 12 months of cumulative gross production are averaging 240,000 bbl of oil per well, with pad averages of 213,000-260,000 bbl of oil per well. Felix’s average lateral length is 9,200 ft/well.
