A&D has come in drips and drabs the past few days after a stellar run of deals fueled in large part by hunger for the Permian Basin.

But deals are always churning, just not quite as quickly as expected.

QEP Resources Inc. (NYSE: QEP), which said in June it would purchase Midland Basin acreage in one of the year’s most expensive per-acre deals, said Sept. 19 it would push back its closing date by about a month.

The reason for the delay was not disclosed in Securities and Exchange Commission (SEC) filings. QEP is purchasing about 9,400 net acres in the northern Midland Basin in Martin County, Texas, for $600 million.

QEP is partially funding the acquisition with proceeds from a public equity offering that raised about $413 million.

If the acquisition falls through, QEP would use the proceeds for general corporate purposes including reducing debt, acquiring properties and funding a portion of E&P activities and working capital.

QEP’s deal with seller RK Petroleum includes production of 1,400 barrels of oil equivalent per day (boe/d) from 96 vertical wells. The acreage contains more than 430 horizontal drilling locations over four horizons—the Wolfcamp A, Wolfcamp B, Middle Spraberry and Spraberry shales, QEP said.

Assuming $40,000 per Mboe/d for the production value, QEP is paying $58,000 per acre, one of the highest valuations for a Permian deal, analysts have said.

Montney Splinter?

In a surprise move, Encana Corp. (NYSE: ECA) said Sept. 19 that it would sell 107 million shares for gross proceeds of more than $1 billion.

The funds will largely be used to fund Midland Basin drilling and the rest of the company’s 2017 spending gap. Encana has been one of the few companies in 2016 to rely on divestitures rather than equity sales for funds, Jonathan D. Wolff, equity analyst at Jefferies, said.

In July, Encana said it completed the sales of its Gordondale and Denver-Julesburg (D-J) Basin assets for about US$1.4 billion.

The decision to use equity puts a spotlight on the tension between the company’s Montney holdings and its Permian Basin assets, Wolff said in a Sept. 19 report.

With high valuation multiples afforded to midcaps in the Montney and the discount Enanca receives relative to its Midland peers, shareholders might start rumbling about exploring strategic suggestions.

Encana could consider “carving out more pieces of the Montney, selling it entirely or even consider a separation of U.S. and Canada into separate entities,” Wolff said, noting it’s unclear how that would affect the company’s taxes.

In any case, Wolff expects Montney spending to slow and the Midland Basin to get more capex.

“Encana’s Midland acreage quality and execution just keeps looking better,” he said. “We think its good logic to expand the Midland program and test more acreage.”

The equity offering could enable a doubling of Permian wells turned to sales in 2017 as compared to 2016.

“The latest guidance was for 65 horizontal wells in 2016, so we can expect there to be about 130 horizontal completions in 2017,” Wolff said.

Unit Awakes

Life maybe returning to Unit Corp. (NYSE: UNT).

Unit is pursuing opportunities to extend its midstream assets into the Stack play in Oklahoma, Seaport Global Securities said in a Sept. 15 report.

“The company noted that parts of its Oklahoma infrastructure are near enough to the Stack to potentially see opportunities for growth,” Seaport said.

In first-quarter 2016, Unit shut down drilling at its E&P operations due to commodity prices. Unit said that if commodity prices hold, the company is likely to resume drilling in late 2016.

The company also said in a call with Seaport that it is continuing to streamline its E&P assets and has sold assets as well as added to its core basins, though “nothing by itself is a large transaction.” The company’s upstream operations include the Mississippian, Hoxbar and Wilcox Liquids Play.

In August, Unit reported in SEC filings that it had sold noncore oil and natural gas assets for $43.6 million in the first half of 2016.

Darren Barbee can be reached at dbarbee@hartenergy.com.