Northern Oil and Gas, Inc. announces Core Permian Basin bolt-on acquisitions

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Northern Oil and Gas, Inc., a firm based in Minnesota announced this week a more than $100 million move to acquire more holdings in the Permian Basin.

The firm said it entered into three definitive agreements to acquire non-operated interests of nearly 2,900 net acres in the heart of Reeves County, Texas and in Lea and Eddy Counties of New Mexico. The combined purchase price was $102.2 million.

“These assets represent the trifecta,” commented Adam Dirlam, Chief Operating Officer of Northern. “We are acquiring high return core properties with top operators, assets with significant inventory and growth potential, and engaging in a transaction expected to meaningfully impact Northern’s free cash flow profile. We expect to generate over $100 million in free cash flow from the assets through 2025, based on current strip prices.”

The May 2021 production from the assets was nearly 2,200 Boe a day and Northern expects average production of 3,700 Boe a day in the second half of the year.

The estimated development plan on the properties over the next several years is expected to grow production to approximately 6,500 Boe per day, assuming current strip prices. Under this development scenario, Northern forecasts the assets to generate over $100 million of cumulative free cash flow through 2025.

The assets include 5.3 net producing wells, 5.0 net wells in process and an additional 23.1 net undrilled locations ascribed to the core zones including the Wolfcamp A, Wolfcamp B and 1st through 3rd Bone Springs. The assets are operated primarily by Mewbourne Oil Company, Colgate Energy, ConocoPhillips and EOG Resources. acquisitions.

Source: Business Wire