Vital Energy signed a definitive joint purchase and sale agreement to acquire the assets of Point Energy Partners (“Point”), a portfolio company of Vortus Investments. This acquisition will significantly expand Vital Energy’s operational scale and footprint in the Delaware Basin.
The transaction, conducted in partnership with Northern Oil and Gas, involves an all-cash consideration of $1.1bn. Under the terms of the agreement, Vital Energy will acquire 80% of Point’s assets, while NOG will acquire the remaining 20%.
Closing price adjustments are expected to total approximately $75m, reducing the total consideration to approximately $1.025bn.
Vital Energy anticipates funding its $820m portion, net of expected purchase price adjustments, via its credit facility of $1.5bn.
The transaction is anticipated to close by the end of the third quarter of 2024, pending customary closing conditions. It will carry an effective date of 1 April 2024.
This transaction is expected to add 68 gross inventory locations (49 net). The assets include approximately 16,300 net acres and net production of approximately 30 thousand barrels of oil equivalent per day (“MBOE/d”) (67% oil), as of the effective date.
Over the past 15 months, Vital Energy has established a high-quality, core operating position in the Delaware Basin, enhancing its significant Midland Basin leasehold. This transaction will expand the company’s Delaware Basin holdings by approximately 25% to 84,000 net acres. Upon closing, the Delaware Basin will account for more than one-third of the company’s oil production.
Vital Energy president and CEO Jason Pigott said: “This bolt-on is a great fit for us, adding high-value inventory and production in the heart of our core operating areas. Furthermore, it expands our growing Delaware Basin position and balances our Permian operations.
“We expect to continue to demonstrate our ability to capture, integrate and create substantial value on acquired assets through optimized development plans, lower capital costs and proven operating practices, resulting in higher future cash flows.”
