An Oklahoma-based oil and gas company, Vital Energy, has recently completed three buyouts valued at a total of $1.2 billion to increase its presence in the Permian Basin. The buyouts include assets in both the western Delaware and eastern Midland sub-basins. These acquisitions will add 53,000 acres and approximately 248 million barrels of oil reserves to Vital Energy’s portfolio. The company expects to produce about 35,000 barrels of oil equivalent per day (boepd) from approximately 150 working locations.
The deal, which involved a combination of stock and cash transactions, is predicted to increase Vital Energy’s average production to 55,000 boepd by the end of 2024. The company’s Permian Basin position will also expand to about 250,000 acres. The sellers of these assets include Henry Energy, Maple Energy Holdings, and Tall City Property Holdings.
The Delaware Basin assets cover approximately 45,000 acres and have a production rate of 27,500 boepd in Reeves County, Texas along the New Mexico state line. The Midland Basin assets include 7,600 acres and produce 7,500 boepd. In total, the production in both basins is approximately 50 percent oil.
Vital Energy’s CEO, Jason Pigott, expressed that these acquisitions align with the company’s strategy of consolidating oil and gas assets in the Permian Basin to drive up revenue and improve shareholder returns. He stated, “We have demonstrated our ability to effectively consolidate Permian assets and identify sustainable synergies to lower costs, improve margins, and enhance free cash flow.”
These buyouts follow Vital Energy’s recent sale of predominantly Permian Basin assets to Kimbell Royalties for approximately $455 million. This transaction included 4,000 producing wells on over a million acres, with 57 percent of the acreage undeveloped.
Additionally, several other companies are making significant moves in the Permian Basin. Evolution Petroleum Corporation and PEDEVCO Corp. announced a joint venture to develop assets in the Chaveroo oilfield in southeast New Mexico. This venture marks Evolution Petroleum’s entry into the Permian Basin and is expected to drive the company’s revenue from this highly productive and cost-effective region.
The Permian Basin remains a leading area for oil and gas operations, with New Mexico and Texas having high drilling rig counts. Recent data from Baker Hughes shows that the Permian Basin added two rigs, bringing the total to 322 rigs. New Mexico dropped two rigs, totaling 102 rigs, while Texas added seven rigs for a total of 317.
Overall, these acquisitions and ventures reflect the industry’s continuing interest in the Permian Basin as a profitable area for oil and gas exploration and production.
Sources:
– Author: Adrian Heddencan
– Title: Oklahoma oil and gas company adds $1.2 billion in buyouts in Permian Basin
– Published date: N/A