Foundation Energy closes Williston basin farmout with Evolution Petroleum

Foundation Energy Management LLC, Dallas, closed a deal to farm out 50% of its interest in certain oil-weighted oil and natural gas assets in the Williston basin to Evolution Petroleum, Houston, for $25.9 million.

The deal gives Evolution Petroleum about 39% working interest net, in 73 producing wells in Billings, Golden Valley, and McKenzie counties, North Dakota, which was acquired by Foundation from a private seller in October 2021.

The acquisition also includes about 47,500 net acres (85% held by production) with associated 400 potential drilling opportunities. The acquired assets consist of producing reserves of about 2 million bbl of liquids and 1,600 MMcf of natural gas. The commodity mix of the assets is 80% oil, 11% natural gas, and 9% natural gas liquids.

Evolution anticipates some of the infill upside locations will be designated proved undeveloped during the company's year-end reserves evaluation. Evolution expects the acquired drilling locations, of which more than 40 are on existing pads with infrastructure and are permitted, will be funded out of future cash. A limited drilling program is not expected to begin until 2023.

The deal increases Evolution's net daily production by about 10% or 596 boe/d, based on the 3 months ended Sept. 30, 2021.