Vital Energy’s joint acquisition of oil and gas properties in the Permian Basin with Northern Oil and Gas has been finalized.
The $540 million deal, announced in May, includes assets in the Delaware Basin of the larger Permian Basin region that includes parts of West Texas and southeast New Mexico.
The Tulsa company joined efforts with the Minneapolis, Minnesota company in acquiring the assets from Forge Energy.
Under the deal, Vital will operate the properties as part of the joint agreement. It also gives Vital a core operating position in the Delaware Basin, which involves 10,200 net acres in Ward and Reeves counties in Texas, along the border with New Mexico. The assets have a capacity of nearly 3,400 barrels of oil equivalent a day at 79% oil.
Vital Energy acquired 70% of the assets for $378 million while Northern Oil and Gas acquired the remaining 30% for $162 million. Vital Energy plans to fund the acquisition through the use of its credit facility.
“This accretive acquisition is attractively priced and significantly expands Vital Energy’s Permian focus, adding a core operating area in the Delaware Basin,” stated Jason Pigott, President and Chief Executive Officer at the time of the May announcement.
“We have a proven track record of building value through our disciplined acquisition strategy. Today’s deal significantly enhances our outlook for Free Cash Flow generation which we will use to pay down debt and strengthen our balance sheet.”