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Multi-Billion Dollar Deal: Ovintiv to Expand Midland Basin Portfolio with EnCap Acquisition and Exit Bakken
04/24/2023
Ovintiv Strikes Billion-Dollar Oil Deal, Doubling Production in Permian Basin with EnCap's Black Swan, PetroLegacy, and Piedra Resources.
The deal, which was approved unanimously by Ovintiv's board, is slated to close on June 30.
With over $5 billion in transactions announced on April 3, Ovintiv is set to expand its oil production by snatching up 65,000 net acres in the core of the Midland Basin. The deal with EnCap will give them a strategic edge in Martin and Andrews counties, Texas, with approximately 1,050 net, 10,000-ft well locations added to their inventory.
In another separate deal, Ovintiv will be leaving the Bakken to play in Williston Basin with EnCap as the buyer.
Check out these quick-fire highlights from Ovintiv's recent announcement
- Total cash proceeds of $825 million in the definitive agreement with EnCap's Grayson Mill Bakken LLC.
- Ovintiv's Bakken leasehold encompasses 46,000 net acres as of Dec. 31, 2022.
- Estimated production in the first quarter of 2023 is set to average around 37,000 barrels of oil equivalent per day (boe/d), with 60% oil and condensates.
Ovintiv's strategic move to sell its Bakken assets is set to turn the industry on its head. With this decision, the company is primed for growth and expansion, and we're excited to see what they have in store next.
Ovintiv's Permian land position is expected to increase to approximately 179,000 net acres
Ovintiv's latest acquisition is set to change the company's presence in the Permian Basin. With the purchase of a "unique undeveloped asset" in the Northern Midland Basin, Ovintiv is expanding its inventory life and scale in the region.
The Midland deal includes:
- 1,050 locations.
- 800 premium-return well locations.
- Around 250 high-potential upside locations.
Ovintiv President and CEO Brendan McCracken raved about the acquisition, stating that it will be immediately and long-term accretive across all key financial metrics.
As a result of the deal, Ovintiv's Permian land position is set to increase to approximately 179,000 net acres.
Ovintiv anticipates that its Permian oil and condensate production will almost double to about 125,000 bbl/d upon completion. Through optimized operations and economies of scale, the company expects to achieve significant cost savings in well development across its combined Permian assets, as stated in a press release.
McCracken, the company's spokesperson, expressed confidence in their ability to convert this high-quality resource into tremendous value for their shareholders due to their operational efficiency, culture of innovation, and expertise and scale in the Permian Basin.
What we know about Ovintiv
Ovintiv is a Canadian-based oil and natural gas exploration and production company. The company operates in North America, with a significant presence in the Permian Basin, Eagle Ford, and Montney regions.
- Ovintiv has a market capitalization of approximately $7.1 billion, as of April 2023.
- The company had proved reserves of 1.8 billion BOE (barrels of oil equivalent) as of December 31, 2021.
- In 2021, Ovintiv produced an average of 452,100 BOE per day.
- Ovintiv has a workforce of approximately 1,500 employees.
- The company is committed to environmental stewardship and has reduced its greenhouse gas emissions by 30% since 2014.
- Ovintiv has a diverse portfolio of assets, with approximately 55% of its production coming from natural gas and 45% from oil.
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Breaking Barriers FireBird II, Empowered by Quantum Technology, Surpasses $500MM Funding Milestone for Permian Ventures
![$data['article']['post_image_alt']](https://images2.rextag.com/public/blog/147Blog_FireBird Energy Permian Basin assets.png)
Following the success of FireBird Energy's $1.75 billion sale to Diamondback last year, the emergence of FireBird II signals a new chapter in the Permian Basin. Get ready for some exciting news from the energy industry. FireBird Energy II, the new player in the Permian Basin, has just secured $500 million in equity funding to fuel their acquisitions. With backing from the esteemed private equity firm Quantum Energy Partners, FireBird Energy II is poised to make waves in the industry.
Exploring the Energy Lifeline: A Tour of Williston Basin's Midstream Infrastructure
![$data['article']['post_image_alt']](https://images2.rextag.com/public/blog/R-149 - Blog Exploring the Energy Lifeline_ A Tour of Williston Basin's Pipeline Infrastructure.png)
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
![$data['article']['post_image_alt']](https://images2.rextag.com/public/blog/184Blog_Rangeland Energy Divests Canadian Pipeline to Kingston Midstream.png)
Rangeland Energy has agreed to sell Rangeland Midstream Canada to Kingston Midstream Alberta and remains committed to future Canadian midstream investments. Texas-based Rangeland Energy, supported by financial partner EnCap Flatrock Midstream, has inked a deal to sell its Canadian subsidiary, Rangeland Midstream Canada Ltd., to Calgary's Kingston Midstream Alberta Ltd. for cash.
![$data['article']['post_image_alt']](https://images2.rextag.com/public/blog/187Blog_ONEOK Completes Acquisition of Magellan Midstream.png)
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.
![$data['article']['post_image_alt']](https://images2.rextag.com/public/blog/186Blog_Viper Energy Secures $1 Billion in Permian.png)
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.