Vital Energy and Northern Oil & Gas acquires Point Energy Partners
Vital Energy has signed a joint purchase and sale agreement with Northern Oil and Gas to acquire the assets of Point Energy Partners, a Vortus Investments portfolio company. Under the terms of the agreement, the two companies will acquire Point Energy’s assets in an all-cash transaction for total consideration of $1.1 billion.
Vital Energy agreed to acquire 80% of Point’s assets, with NOG acquiring the remaining 20%. The transaction is expected to close by the end of Q3 of 2024 with an effective date of April 1, 2024, subject to customary closing conditions.
The purchase price is substantially underwritten by the value of proved developed producing reserves and eight work-in-process wells. Using SEC pricing, third-party reserve engineer Ryder Scott estimates the PDP reserves and work-in-process wells to have a PV-10, as of the effective date, of $742 million and $71 million, respectively.
This transaction will increase the Company’s Delaware Basin position by approximately 25% to 84,000-net acres and is expected to add 68 gross inventory locations (49 net) with an estimated average breakeven oil price of $47 per barrel. The assets include approximately 16,300 net acres and net production of approximately 30,000 mboe per day (67% oil), as of the effective date.
The company estimates a one rig development program would facilitate the drilling and completion of 12 wells over a 12-month period, resulting in total production of approximately 15.0 mboe per day (64% oil) and capital investments of approximately $100 million.
