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NOG Acquires Working Interest in the Mascot Project, Midland Basin
11/30/2022
Northern Oil and Gas Inc. (NOG) made a $330 million purchase in the Permian Basin, according to the release on October 19.
NOG revealed an agreement to purchase a 36.7% working interest in the Mascot Project from Midland-Petro D.C. Partners LLC (MDPC). The acquisition will be funded with cash on hand, operating free cash flow, and borrowings.
The Mascot Project is operated by Permian Deep Rock Oil Co., an affiliate of MPDC, which is a David H. Arrington-owned business based in Midland, Texas. NOG anticipates that the production from the acquired properties to average almost 4,400 boe/d in the first quarter of 2023 and 6,450 boe/d for the full-year 2023 (2-stream, about 80% oil).
NOG’s goal is to be the go-to resource for operators that are eager to offload non-operated working interests in leasehold. Based in Minnetonka, Minn., and concentrating in the Williston Basin, the company has also extended into the Marcellus Shale and Permian Basin through a series of acquisitions.
It is important to notice, that NOG has incredibly developed its position in the Permian Basin in 2022, as the company’s dealmaking this year was resurrected in January with the closing of a $406.5 million acquisition of Veritas Energy’s non-op position in the Permian, which marked the company’s greatest purchase to date. Consequently, NOG has increased nearly $400 million worth of additional acquisitions in the Permian Basin.
Transactions have included a bolt-on acquisition of core northern Delaware Basin properties claimed in late September for an initial purchase price of $157.5 million and the closing of a $110 million deal for Midland Basin properties from Laredo Petroleum Inc. on October 6, and an additional northern Delaware Basin bolt-on acquisition disclosed by NOG on October 11.
The newly acquired assets are situated in Midland County, Texas, and include four all-depth contiguous drilling spacing units developed for long laterals, 12.1 net producing wells, 5.5 net wells-in-process, and about 17.3 net undeveloped locations. The properties have incurred minimal legacy vertical drilling relative to typical Midland Basin properties.
NOG is also acquiring a pro rata interest in the midstream assets and associated infrastructure, which show roughly $36 million of the allocated value of the transaction.
The effective date for the transaction is Aug. 1, and NOG anticipates closing the transaction in January. Citigroup Global Markets served as NOG’s financial adviser. Kirkland & Ellis LLP serves as the company’s legal adviser. Petrie Partners served as MPDC’s financial adviser. Hunton Andrews Kurth LLP serves as MPDC’s legal adviser.
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Mascot Project Acquisition: NOG says Midland Basin Deal Is Completed
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On January 5 Northern Oil & Gas (NOG) concluded a deal to acquire working interests in Midland-Petro D.C. Partners LLC (MPDC)'s Mascot Project in the Midland Basin, according to a January 9 press release. Firstly estimated at $330 million in cash, the deal was signed with an additional 3.25% working interest added to the 36.7% agreed upon when the transaction was announced on October 19. NOG paid $29 million more for the additional interests, which now totalled 39.958%. Finally, the deal closed for $320 million in cash and $43 million in debt at signing in October with the finance of Minnetonka, Minn.-based NOG with cash on hand, operating free cash flow, and assistance from its revolving credit facility.
NOG Grows Its Acreage Position in Delaware
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According to the company’s press release on December 19, Northern Oil and Gas Inc. (NOG) closed its announced deal with a private seller of non-operated interests in the Northern Delaware Basin for $131.6 million in cash. The acquisition was announced with a $13 million deposit in October and is the third Permian Basin acquisition since August, adding to NOG’s $400 million of Permian Basin acquisitions in 2022. The assets of 2,100 net acres are primarily operated by a private company Mewbourne Oil Co., with production anticipated to total almost 2,500 boe/d in 2023. Also, Coterra Energy Inc. and Permian Resource Corp. are operators of the assets. The assets contain high-quality, low breakeven development that is leveraged to some of NOG’s top operating partners, as our investors have come to expect.
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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.
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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.
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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.