Vital Energy, Northern Oil and Gas partner to buy Point Energy assets for $1.1B

Vital Energy Inc. and Northern Oil and Gas (NOG) said on Sunday they will jointly acquire U.S. shale assets from private equity-owned Point Energy Partners for $1.1 billion.

Vital will buy an 80-percent stake in the Point Energy assets, which are located in the Delaware portion of the Permian Basin, the nation’s highest-producing oil field, stretching across Texas and New Mexico. NOG will buy the remaining 20 percent, the companies said.

The transaction is expected to increase Vital Energy’s operational scale and footprint in the Delaware Basin and add high-value development inventory, the company said.

“This bolt-on is a great fit for us, adding high-value inventory and production in the heart of our core operating areas,” said Vital Energy President and Chief Executive Officer Jason Pigott yesterday.

Furthermore, Pigott said, the deal will expand the Tulsa, Okla.-based independent energy company’s growing Delaware Basin position and balance its Permian operations.

“We expect to continue to demonstrate our ability to capture, integrate, and create substantial value on acquired assets through optimized development plans, lower capital costs, and proven operating practices, resulting in higher future cash flows,” he said.

Specifically, Vital Energy signed the agreement in partnership with publicly traded NOG in an all-cash transaction that’s expected to close by the end of 2024’s third quarter, with an effective date of April 1, 2024, subject to customary closing conditions.

Closing price adjustments are expected to total approximately $75 million, reducing total consideration to approximately $1.025 billion, says Vital Energy, which expects to fund its $820 million portion through the use of its credit facility, which was recently expanded to $1.5 billion.

The assets Vital Energy has purchased from Point include roughly 16,300 net acres with net production of about 30,000 barrels of oil per day as of April.

Meanwhile, NOG is buying Point’s assets that include 4,000 net acres, primarily in Ward County, Texas, with recent production of over 4,500 barrels of oil per day. Vital Energy will operate these assets and NOG will contribute to developing them, the companies said.

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