Asset A&D

Northern Oil & Gas Acquires Permian Basin Acreage in Texas and New Mexico

By Isha Makkar
May 28, 2021
2 minutes read
Oil Pump Jack Sunset Clouds Silhouette

NYSE-listed Northern Oil & Gas Inc. has entered into three separate definitive agreements with Texas-based CM Resources LLC and certain other undisclosed sellers to acquire a combined approximately 2,900 net acres of Permian basin assets located in Texas and New Mexico, for a combined purchase price of US$102.2 million.

The transaction is a combination of two completed acquisitions with undisclosed sellers, for a combined consideration of US$8.2 million, and a pending Purchase and Sale Agreement (PSA) with CM Resources, for a consideration of US$94 million, subject to customary purchase price adjustments.

The acreage acquired comprises approximately 2,900 net acres of Permian basin assets located across Reeves county in Texas, and Lea and Eddy counties in New Mexico. The assets primarily target the Wolfcamp A, Wolfcamp B, and 1st through 3rd Bone Springs formations, and contain 5.3 net producing wells, with five net wells under process. The net average daily production attributable to the acreage was approximately 2,200 barrels of oil equivalent per day (boe/d) during May 2021, of which approximately 66% was oil.

“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,” said Adam Dirlam, COO of Northern Oil & Gas.

Based in Minnesota, Northern Oil & Gas is focused on operations in the Bakken/Three Forks play in the Williston basin of North Dakota and Montana, and in the Permian basin.

CM Resources is engaged in the production of oil and natural gas assets across the United States.

Two of the three transactions were completed in June 2021. The third is expected to be completed in Q3-2021. All transactions have an effective date of April 1st, 2021.

More news
Access our Global Upstream Oil & Gas M&A, Financing and Corporate Database
Quick registration, online payment and instant access
View pricing