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Energy Giant Baytex Makes a Bold Move: Snaps Up Ranger Oil in $2.5 Billion Deal

Baytex Energy Group has announced that it will acquire Eagle Ford exploration and production company, Ranger Oil, for approximately $2.5 billion in cash and stock, which includes taking over the company's existing debt.

Upon the successful closure of the acquisition, Baytex will have a controlling stake of approximately 63% in the newly merged company, leaving Ranger shareholders with around 37%. This significant move is in line with a trend of substantial mergers and acquisitions in the Eagle Ford area, with Marathon Oil, Devon Energy, and Chesapeake Energy among the companies involved in recent transactions.

Baytex is all set to acquire Ranger Oil, with the deal scheduled to close in the second quarter of 2023. The CEO of Baytex, Eric T. Greager, is excited about the move and expects it to work wonders for the company's financials.

The acquisition opens up a world of opportunities for Baytex, with Ranger Oil's inventory now competing for capital within their portfolio. This creates the potential for up to 15 years of oil-weighted drilling locations, a massive boost for Baytex's growth prospects. Moreover, the acquisition adds Eagle Ford scale to Baytex's existing non-operated position in the Karnes Trough.

The key details of the Baytex-Ranger Oil deal are:

The acquisition covers 162,000 net acres in the crude oil window of the Eagle Ford shale, with a significant presence in Gonzales, Lavaca, Fayette, and Dewitt counties in Texas.
The deal will add between 67,000 boe/d to 70,000 boe/d to Baytex's production, with 72% light oil, 15% NGLs, and 13% natural gas.
The acquisition also results in a boost in the company's proved reserves by 174 MMboe.
Baytex CEO, Eric T. Greager, believes the acquisition will provide a more durable business with a lower breakeven WTI price and bring meaningful per-share accretion on all metrics.

Quick Facts: Baytex Energy Group's Operations in Eagle Ford Shale

Baytex Energy Group has a significant presence in Eagle Ford, which includes 19,900 acres of net contiguous land holdings.
In the FY/2022, the company recorded a production of 28,200 barrels of oil equivalent per day.
Baytex's assets comprise non-operated working interests in four areas of mutual interest (Sugarloaf, Longhorn, Ipanema, and Excelsior), with an average working interest of roughly 25%. The company deploys hydraulic fracturing techniques to extract oil from horizontal wells.
In 2023, Baytex plans to bring approximately 15 net wells into production.

According to Baytex, there are currently 741 net undrilled locations available for oil exploration and production, which would provide an inventory life of 12 to 15 years. These locations are in direct competition for capital within Baytex's portfolio. Out of the 741 locations, 523 are high-quality opportunities located in the Lower Eagle Ford, with the remaining 218 opportunities located in the Upper Eagle Ford and Austin Chalk formations.

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Ranger Oil Acquisition by Baytex: Boosting Shareholder Returns and Introducing Dividend with Improved Free Cash Flow in Eagle Ford Operations

Baytex Energy, a Canadian oil and gas company, has announced its acquisition of Ranger Oil, an Eagle Ford operator based in Texas, in a deal worth $150 million. The acquisition will accelerate Baytex's shareholder returns and introduce a dividend with enhanced free cash flow.

The Williston Basin, which spans parts of North Dakota, Montana, Saskatchewan, and Manitoba, is a major oil-producing region in North America. In order to transport crude oil and natural gas from the wells to refineries and other destinations, a vast pipeline infrastructure has been built in the area. The pipeline infrastructure in the Williston Basin consists of a network of pipelines that connect production sites to processing facilities, storage tanks, and major pipeline hubs

Rangeland Energy has agreed to sell Rangeland Midstream Canada to Kingston Midstream Alberta and remains committed to future Canadian midstream investments. Texas-based Rangeland Energy, supported by financial partner EnCap Flatrock Midstream, has inked a deal to sell its Canadian subsidiary, Rangeland Midstream Canada Ltd., to Calgary's Kingston Midstream Alberta Ltd. for cash.

The merger between ONEOK and Magellan received approval from Magellan shareholders, securing just 55% of the total votes at Magellan’s meeting on Sept. 21. ONEOK Inc. has successfully concluded the acquisition of Magellan Midstream Partners LP on Sept. 25. The deal will bring together their respective assets and expertise, resulting in a powerful entity boasting an extensive network of approximately 25,000 miles of pipelines primarily focused on transporting liquids.

Viper Energy's deal, comprised of cash and equity, secures an additional 2,800 net royalty acres in the Midland Basin and 1,800 in the Delaware Basin. Viper Energy Partners LP, a Diamondback Energy Inc. subsidiary, has inked a deal to acquire mineral and royalty interests in the Permian Basin. The deal, valued at around $1 billion, is with Warwick Capital Partners and GRP Energy Capital. Viper was established by Diamondback with the purpose of owning, purchasing, and capitalizing on oil and natural gas assets in North America, specifically targeting mineral and royalty interests.

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