Northern Oil and Gas Inc., Minneapolis, has agreed to acquire from VEN Bakken LLC the company’s Williston basin assets for $165 million in cash, a $130 million 6% 3-year senior unsecured note due 2022, and some 5.6 million shares of Northern common stock.
Ven Bakken, a wholly-owned subsidiary of Flywheel Bakken LLC (formerly Valorem Energy), a portfolio company of the Kayne Private Energy Income Funds, will divest some 18,000 net acres containing 86.9 net producing wells, 2.7 net wells in process, and 47.5 net undrilled locations. In this year’s second half, the assets are expected to produce 6,600 boe/d (2-stream) and generate $44.9 million in cash flow from operations (unhedged), with an estimated second half capital expenditure budget of $15.6 million.
In October 2018, Northern Oil and Gas closed on the previously announced acquisition of Williston basin assets from W Energy Partners, the largest acquisition in the company’s history (OGJ Online, July 31, 2018). Just prior, Northern announced plans to acquire a North Dakota asset from Tailwater Capital LLC-backed Pivotal Petroleum Partners as well as two bolt-on Williston basin acquisitions in June (OGJ Online, July 18, 2018; June 8, 2018; June 27, 2018).
With an interest in over 5,000 gross wells across its 157,000-acre position in the Williston basin at yearend 2018, Northern Oil and Gas increased production 73% over the prior year, averaging a record of 25,555 boe/d, as reported in March.
The transaction is expected to close and be effective on July 1. The cash and note portions of the consideration are subject to closing and post-closing adjustments.