Northern Oil & Gas Acquires Delaware Basin Assets in New Mexico
NYSE-listed Northern Oil & Gas Inc. has entered into an agreement with an undisclosed seller to acquire non-operated interests in certain properties and acreage in the Delaware Basin in Lea County, New Mexico.
The total acquisition costs, including the initial development costs is estimated to be approximately US$11.9 million. Northern expects approximately 54% of this capital to be incurred in 2020, all of which would be within the company’s previously announced 2020 capital budget.
The acquired assets include non-operated interests for approximately 66 net acres, on which 1.1 initial net wells have been proposed. The proposed wells are expected to be spud in late 2020 and/or early 2021 and turned in line beginning in Q2-2021. The acreage is operated by EOG Resources Inc., and carries additional future development upside. The future peak production on the initial wells is expected to be approximately 1,400 barrels of oil equivalent per day during Q2-2021.
Minnesota-based independent Northern Oil & Gas is currently focused on the acquisition of non-operated interests in the Bakken / Three Forks play in the Williston basin of North Dakota and Montana.
“We have been actively building data in the Permian Basin for two years. The 2020 downturn in the energy sector has made the Permian Basin competitive for the first time, inclusive of acreage costs, on a full cycle return basis with our Williston Basin program. Coupled with Northern’s Ground Game acquisitions in the Williston, this increased opportunity set should add additional breadth to our strategy as the natural consolidator of non-operated working interests… With this deal, we continue to carefully invest counter cyclically in high return future cash flows and inventory to capture upside, while ongoing operations continue to improve”, said Nick O’Grady, CEO.