HighPeak Energy Inc., Fort Worth, Tex., agreed to acquire the Howard County, Tex. oil and gas assets of Hannathon Petroleum, Midland, Tex., and other non-operated working interest owners, and expects to maintain the company’s existing one-rig Permian basin drilling program through 2022.
The bolt-on acquisition adds some 150 net drilling locations and 18,600 net acres largely contiguous to the company’s existing Signal Peak position in the Midland basin with estimated 2022 average production of 5,000 boe/d (85% liquids), the company said in an Apr. 27 release. HighPeak currently owns non-operated working interest in about 60% of the acquired gross acreage position.
The deal includes Hannathon-owned water infrastructure, which is proximal to HighPeak’s existing Signal Peak acreage, the company said in an April investor presentation.
With the deal, coupled with targeted leasing, HighPeak has increased its total acreage position to over 91,000 net acres. HighPeak said the contiguous acreage position, non-operated overlap, and shared infrastructure is expected to provide about $70 million of realizable synergies on a present value basis.
Updated 2022 guidance includes average production of 32,000-37,500 boe/d with an exit production rate of 47,000-53,000 boe/d with expected total capital expenditures of $825-900 million.
Combined consideration for the private oil and gas company assets is expected to reach $373.4 million ($255 million cash, 3.78 million shares of HighPeak common stock).
Closing, subject to customary approvals and conditions, is expected in third-quarter 2022.
HighPeak was formed in 2020 through the combination of HighPeak Energy and Pure Acquisition Corp., a special purpose acquisition company (OGJ Online, Aug. 4, 2020).