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NOG Grows Its Acreage Position in Delaware

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.

With an effective date of November 1, 2022, the purchase is expected to add roughly $55 million of unhedged cash flow in 2023 as of October 10.

NOG, based in Minnetonka, Minn., targets to be the go-to resource for operators that want to offload non-operated working interests in leasehold. Initially, concentrated in the Williston Basin, the company has also extended into the Marcellus Shale and Permian Basin through a series of purchases.

NOG has incredibly expanded its position in the Permian Basin in 2022. The company’s dealmaking this year soared 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 largest investment to date.

Since then, NOG has increased almost $400 million worth of additional acquisitions in the Permian. Transactions have included a bolt-on acquisition of core northern Delaware Basin properties announced 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.

One more northern Delaware Basin bolt-on acquisition unveiled by NOG on October 11 includes core non-operated working interest properties in New Mexico’s Lea and Eddy counties and Loving and Winkler counties in West Texas. The purchased assets cover approximately 2,100 net acres, 5.3 net producing wells, 2.1 net wells-in-process, and about 17.2 net undeveloped locations.

Production of almost 2,500 boe/d (68% oil, 2-stream) is anticipated from the acquired assets for 2023, making an estimated $55 million of unhedged cash flow in 2023 at strip pricing as of October 10 and resulting in a 2.4x transaction multiple.

Wells Fargo Securities is the financial adviser to NOG for the acquisition. Kirkland & Ellis LLP is serving as the company’s legal adviser. TPH & Co., the energy business of Perella Weinberg Partners, served as a financial adviser to the seller, and Bracewell LLP is serving as the seller’s legal adviser.

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CA$375 Million Bolt-on Deal to Expand Crescent Point

On December 9, Crescent Point Energy Corp. announced a purchase and sale agreement to develop its core Kaybob Duvernay assets, which will bolt on production, the midstream infrastructure and technical data. With the deal, the company has committed more than US $1 billion to the play. Crescent Point, the Alberta-based company, is purchasing almost 65,000 net acres from Paramount Resources Ltd. for CA $375 (US $274 million) cash. The assets estimate more than 4,000 boe/d, 50% liquids, and include a gas plant, associated pipelines, water infrastructure, and seismic data. The acquired asset’s production consists of 35% condensate, 15% NGL, and 50% shale gas.

On January 3, U.S. natural gas producer Rockcliff Energy from private equity firm Quantum Energy Partners was set to be sold to a unit of Tokyo Gas Co. Ltd. for roughly $4.6 billion, including debt. The all-cash agreement with Houston-based TG Natural Resources, which is 70% possessed by the Japanese energy firm, is decided to be claimed this month, according to anonymous resources, as the discussions were requested to be confidential. Castleton Commodities International (CCI) owns the rest of TG Natural Resources.

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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