SM Energy Co. (NYSE: SM) closed the acquisition of oil and natural gas assets in Howard and Martin Counties, Texas, from QStar LLC and a related entity for $1.6 billion, according to a Dec. 21 press release.

SM Energy said it will operate two rigs on this leasehold position during 2017, starting in the first quarter.

SM Energy estimates its Midland Basin footprint is about 87,600 net acres, including the pending acquisition of additional leasehold interests announced in early December.

The closed acquisition was funded by cash proceeds from recent asset divestitures and the issuance of 13.4 million common shares to sellers. The transaction’s effective date is Sept. 1.

Denver-based SM Energy said it will operate two rigs on this leasehold position during 2017, starting in the first quarter.