Whiting Petroleum to Exit D-J Basin in A&D Double Play

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.