Whiting Petroleum Corp. is wishing its home state of Colorado goodbye in an A&D double play disclosed by the Denver-based company on July 21.
In a company release, Whiting said it had entered into separate definitive agreements totaling $458 million to acquire oil and gas assets in the Williston Basin of North Dakota and divest all its oil and gas assets in the Denver-Julesburg (D-J) Basin of Colorado.
“These two transactions result in a significantly deeper drilling inventory in our key Sanish operating area, while divesting of properties in Colorado that were not going to compete internally for capital,” commented Lynn A. Peterson, president and CEO of Whiting, in the company release.
Whiting is acquiring the Williston Basin assets, which adjoin and complement its existing operations in the Sanish Field, from an undisclosed private company for total cash consideration of $271 million, before typical closing adjustments.
The acquisition include 8,752 net acres in North Dakota’s Mountrail County with net daily production of approximately 4,200 boe/d (80% oil). Additionally, the purchase adds 5 gross (2.3 net) DUCs and 61 gross (39.5 net) undrilled locations (100% operated), which the company said will immediately compete for capital within its existing portfolio.
For the sale of its D-J Basin asset, a private entity agreed to acquire the position, including associated midstream assets, located in Colorado’s Weld County for total cash consideration of $187 million, before typical closing adjustments. The assets span 67,278 net acres with daily production of approximately 7,100 boe/d (51% oil).
“These transactions demonstrate our strategy to focus our attention on value-enhancing opportunities that compete for capital in a $50 oil environment,” Peterson continued in his statement.
“Including these transactions,” he said, “the company now estimates that in a mid-$50s oil environment it has over 6 years of high-quality drilling inventory, assuming a two rig drilling program.”
Both transactions are expected to close third-quarter 2021 with the difference in acquisition costs and divestiture proceeds funded with existing availability on the company’s revolver.
Recommended Reading
Dividends Declared in the Week of May 6
2024-05-10 - Here is a selection of upstream, midstream and service and supply companies’ dividends declared in the past week.
OFS Sector Loses Jobs, but Trade Org Says Growth Potential Remains
2024-05-08 - According to analysis by the Energy Workforce & Technology Council, the OFS job market may still have potential for growth despite a slight decrease in the sector in April.
Exxon Appoints Maria Jelescu Dreyfus to Board
2024-05-08 - Dreyfus is CEO and founder of Ardinall Investment Management, a sustainable investment firm, and currently serves on the board of Cadiz Inc. and Canada-based pension fund CDPQ.
E&P BW Energy Undergoes ‘Technical’ Ownership Restructuring
2024-05-08 - The restructuring will not involve any change to the ultimate control of BW Energy as the shares currently held by BW Group will be sold to BW Energy Holdings.
Hess Midstream Subsidiary Plans Private Offering of Senior Notes
2024-05-08 - The proposed issuance is not expected to have a meaningful impact on Hess Midstream’s leverage and credit profile, according to Fitch Ratings.