Earthstone Energy Inc. has agreed to acquire Novo Oil & Gas Holdings LLC, a privately held Delaware basin-focused exploration and production company backed by EnCap Investments LP, for $1.5 billion. Concurrently, Northern Oil and Gas Inc. will acquire working interests equal to a pro-rata 33⅓% of the oil and gas assets of Novo for $500 million from Earthstone, resulting in a $1.0 billion purchase price net to Earthstone for the retained 66⅔% interest.
The company added 11,300 net acres (99% operated, 57% working interest, 86% held by production) in the core of Delaware basin in Eddy County, NM, and Culberson County, Tex. It will increase production by 38,000 boe/d from 114 wells, bringing its total output to more than 135,000 boe/d. Total proved developed and PV10 reserves acquired are roughly 73.9 MMboe.
“The addition of approximately 200 high-quality, low breakeven locations deepens our drilling inventory and, with our flat rig count, extends our inventory life significantly to over a decade,” added Earthstone president and chief executive officer Robert J. Anderson.
Closing is anticipated third-quarter 2023, subject to customary conditions.
