Northern Oil and Gas, Inc. NOG, along with SM Energy Company SM, has exercised the option to acquire additional assets in the Uinta Basin. NOG plans to acquire an additional 20% undivided stake in the Uinta Basin assets for an unadjusted price of $17.5 million in cash. These assets were previously owned by Altamont Energy LLC. The newly acquired assets lie adjacent to the ones that NOG already acquired from XCL Resources, LLC.
Altamont Energy’s assets were in the process of being acquired by XCL Resources. NOG and SM Energy had the option to purchase these assets under the first refusal provision, which was part of their $2.5 billion deal to acquire XCL’s acreage.
The acquired assets, located primarily in Duchesne and Uintah Counties, UT, are set to expand NOG’s footprint in the Uinta Basin by approximately 6,500 acres. The acreage is estimated to have 18 net undeveloped locations, per a statement from NOG. These properties are expected to produce 250 barrels of oil equivalent (BOE) per day.
The acquisition of the additional 20% stake is expected to be concluded in the fourth quarter of 2024, alongside the XCL asset acquisition. Following the close of the transaction, the assets will be operated by SM Energy. Northern Oil and Gas will be involved in the development of these assets under the cooperation and joint development agreement that it signed during the XCL assets acquisition.
NOG highlights that the Altamont assets will substantially add to its Uinta Basin footprint. The deal is expected to increase its Uinta inventory by nearly 20%, alongside a 70% expansion in the acreage. NOG added that this transaction offers a notable exploration potential with minimal cash outlay.
In June 2024, SM Energy entered into an agreement with XCL Resources to acquire its Uinta Basin acreage for approximately $2.55 billion. It agreed to sell 20% stake in these assets to NOG for $510 million.
Zacks Rank and Other Key Picks
Currently, NOG carries a Zacks Rank #2 (Buy), while SM sports a Zacks Rank #1 (Strong Buy).
Some other top-ranked stocks in the energy sector are VAALCO Energy EGY and Matador Resources MTDR. VAALCO Energy and Matador carry a Zacks Rank #2 each. You can see the complete list of today’s Zacks #1 Rank stocks here.
VAALCO Energyis an independent energy company involved in upstream operation business with a diversified presence in Africa and Canada. Having a large inventory of drilling locations in premium Canadian Acreage, the company’s production outlook seems bright.
Matador Resources is a leading U.S.-based exploration and production firm. The company has consistently exceeded production expectations, demonstrating operational efficiency and robust growth. For 2024, the company expects its average daily oil equivalent production to be in the range of 158,500-163,500 BOE/d. The robust production outlook, combined with the favorable oil price environment, is expected to positively impact MTDR’s bottom line.
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SM Energy Company (SM) : Free Stock Analysis Report
Vaalco Energy Inc (EGY) : Free Stock Analysis Report
Matador Resources Company (MTDR) : Free Stock Analysis Report
Northern Oil and Gas, Inc. (NOG) : Free Stock Analysis Report
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