The Oklahoma oil and gas operators in the Permian Basin face a growing competitor—Permian Resources revealed this week it made a $608 million acquisition of 13,320 net acres and 8,700 net royalty acres in New Mexico.
Apache parent APA Corp. sold the acreage which is located near the core operating areas of Permian Resources, a firm based in Midland, Texas and the deal was announced in its first quarter earnings report.
he acquired acreage is over 65% operated and has an average 8/8ths net revenue interest of approximately 83%. The acquisition is expected to be accretive to all key per share metrics. The transaction is expected to close by the end of the second quarter of 2025.
The bolt-on acquisition meets and exceeds Permian Resources’ acquisition criteria for growing its high-return and low breakeven inventory. Permian Resources has identified over 100 gross operated, two-mile locations with high NRIs which immediately compete for capital. The acquired inventory scheduled for development over the near-term achieves an average breakeven of $30 per barrel WTI. The asset’s shallow base decline and high-return inventory drive a low reinvestment rate of approximately 35%, which supports the long-term accretion of the acquisition.
Permian Resources has identified significant upside potential associated with the acquired assets. In addition to new operated inventory, the acquisition increases working interest in over 100 existing Permian Resources operated locations, given the sizable acreage overlap. Additionally, the acquired properties include high-quality non-operated acreage adjacent to and surrounding Permian Resources’ current position. Utilizing its highly effective ground game, the Company plans to leverage this acreage to trade for incremental interests in existing operated units or establish new operating units.
“This acquisition is a natural fit for us and has material upside that Permian Resources is uniquely positioned to realize. We continue to grow our high return inventory, our net royalty acre portfolio and our acreage footprint in a cost-efficient manner that reflects the current environment. Our overarching goal is to drive long-term value for our investors, and we believe the addition of high-quality assets adjacent to our core position, acquired during a lower commodity price environment will further enhance short and long-term returns for investors,” said James Walter, Co-CEO.