Tulsa’s Vital Energy Inc. is expanding its Permian Basin holdings with a $55 million acquisition of additional working interests from Permian Basin operator Henry Energy LP, Moriah Henry Partners LLC and Henry Resources LLC.
It’s part of the independent company’s goal of increasing the acquisition, exploration and development of oil and natural gas properties in the Permian Basin of West Texas.
In making the announcement, Vital leadership said the purchase will increase the company’s working interest in 45 wells by an average 24% and also boost the company’s estimate 2024 production by nearly 1,400 BOE/D of which 57% is oil. The deal will also increase Vital Energ’s 2024 Free Cash Flow by nearly $20 million and help the firm’s deleveraging goals.
The transaction is associated with the exercise of tag-along rights by owners of certain assets in the Henry acquisition that enable Vital Energy to purchase and finance the assets on the same terms as the Henry purchase and sale agreement, in which the Company’s shares were issued at $54.96. Vital Energy funded the transaction through the issuance of 627,000 shares of its common stock and 595,000 shares of its 2.0% cumulative mandatorily convertible preferred securities.
“This transaction further demonstrates the opportunities provided by our increased scale in the Permian,” stated Jason Pigott, President and Chief Executive Officer.
“Our larger operating footprint across the Midland and Delaware basins continues to drive new efficiencies through bolt-on transactions that increase working interest or optimize our development plans by enabling longer laterals. As we successfully integrate these high-value acquisitions we expect to see continued gains in capital efficiency and stronger Free Cash Flow.”
the acquisition, exploration and development of oil and natural gas properties in the Permian Basin of West Texas.