Northern Oil & Gas Inc. will acquire a North Dakota asset currently producing more than 4,100 boe/d from Tailwater Capital LLC-backed Pivotal Petroleum Partners for $68.4 million in cash and 25.75 million shares of common stock.
Northern expects the asset to generate $56 million of cash flow from operations over the next 12 months. The combination of the Williston basin asset, along with the company’s growing inventory of future drilling locations, will help in its goal to be cash flow positive upon closing, said Pres. Mike Reger.
The deal comes on the heels of two bolt-on Williston basin acquisitions in June (OGJ Online, June 8, 2018; June 27, 2018).
Pivotal will be subject to a lock-up on the shares over a 13-month post-closing period and potential additional consideration may be added during the period if Northern’s common stock trades below certain price targets, Northern said.
The deal is expected to close in 60 days.