Northern Oil & Gas and SM Energy, which are acquiring Uinta Basin E&P XCL Resources, will acquire additional assets in the basin with the purchase of Altamont Energy, which XCL had been trying to buy. (Source: Shutterstock, Northern Oil & Gas, SM Energy)
Northern Oil & Gas (NOG) and partner SM Energy are adding more interests in the Uinta Basin in a follow up deal to the companies’ pending acquisition of XCL Resources.
On Aug. 6, NOG said that Altamont Energy, previously under contract to be purchased by XCL Resources, was offered to NOG and SM under a right of first refusal in connection with their proposed XCL acquisition.
As a result, NOG will acquire the 20% stake in Altamont for a purchase price, net to NOG, of $17.5 million cash, subject to customary closing adjustments.
The acquired assets are located primarily in Uintah and Duchesne counties, Utah, and include approximately 6,500 net acres. NOG estimates the Altamont stake will add approximately 18 net undeveloped locations on the properties and ~250 boe/d of production.
After closing, SM will be the operator of substantially all of the Altamont assets, with NOG participating in development pursuant to cooperation and joint development agreements entered in connection with the XCL asset acquisition.
The arrangement mirrors SM and NOG’s pending acquisition of XCL Resources in a deal valued at $2.55 billion. NOG’s part of that deal will also see it acquire a 20% undivided stake in XCL valued at $510 million. SM will be the operator of XCL’s assets.
“We are excited to execute the option to purchase additional Uinta assets under our Area of Mutual Interest agreement with SM. The Altamont assets increase our Uinta footprint substantially and are a testament to the benefits of the joint venture structures we have pursued in recent years,” O’Grady said in a press release. “This transaction grows our estimated Uinta inventory by nearly 20%, and given the 70% increase in acreage, provides significant future exploration potential for a minimal cash outlay.”
NOG said it expects to close the Altamont transaction simultaneously with the XCL transaction in early fourth-quarter 2024.
RBC Capital Markets served as financial adviser to NOG for the XCL and Altamont acquisitions.
Kirkland & Ellis LLP is serving as legal counsel to NOG.
Recommended Reading
Commentary: Maximizing the Opportunity for Energy Dominance
2024-12-18 - Energy produced in the U.S. already has a strong grip on global markets. But with the country on the cusp of a new regulatory environment, will the U.S. capitalize on the opportunity to maximize energy dominance?
Canadian Premiers Urge Strong Response to Trump Tariff Threat, Minister Says
2024-12-12 - Ontario Premier Doug Ford said energy exports to the United States could also be halted, without offering further details.
Equinor, Lazard Ponder Fate of the Inflation Reduction Act
2024-12-13 - With a new incoming Trump administration, there is concern about what changes are in store for President Biden’s signature climate legislation, the Inflation Reduction Act.
Attitude Adjustment Incoming from DC, Energy Experts Say
2024-11-25 - The energy Industry can expect more cooperation from the federal government through personnel and policy adjustments.
Bracewell: How Trump and Harris Differ (or Don’t) on Energy Policy
2024-10-16 - Presidential impact on energy prices is largely about perception, although LNG permitting, production incentives and the Inflation Reduction Act will be influenced depending on who is in the White House.
Comments
Add new comment
This conversation is moderated according to Hart Energy community rules. Please read the rules before joining the discussion. If you’re experiencing any technical problems, please contact our customer care team.