Page 10 - NorthAmOil Week 46 2021
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NorthAmOil INVESTMENT NorthAmOil
Northern to buy Permian assets
from Veritas for $406.5mn
PERMIAN BASIN NORTHERN Oil and Gas has agreed to buy sub- include Devon Energy, ConocoPhillips, EOG
stantially all of the non-operated Permian Basin Resources and Mewbourne Oil.
properties owned by affiliates of Veritas Energy The assets currently produce around 9,100
in its largest acquisition to date. barrels of oil equivalent per day (boepd) on a
The definitive agreement will see Northern two-stream basis, with oil comprising roughly
pay $406.5mn in cash for the assets, which are 60%. Northern anticipates raising average pro-
spread across both the Delaware and Midland duction from the assets above 10,500 boepd in
sub-basins of the Permian. Also as part of the 2022, with capital expenditures of $35-40mn
transaction, Northern will also issue roughly directed to these operations.
1.9mn seven-year equity warrants with a strike “The Veritas transaction marks our fourth
price of $28.30 at closing to Veritas. The com- significant transaction in 2021 as we return focus
pany expects to kick off a public equity offering to the Delaware Basin, further scaling our busi-
to fund a portion of the acquisition. ness and building inventory with premier oper-
In total, the transaction is estimated to be ators,” commented Northern’s chief operating
worth $537.7mn. officer, Adam Dirlam. “Northern continues to
The assets are primarily located in Lea and set the standard for non-operated energy man-
Eddy counties in New Mexico and Loving, agement and will remain steadfast in our focus
Reeves, Ward and Winkler counties in Texas. on consolidating high quality, low break-even
They include 31.7 net producing wells, 5.6 net assets,” he added.
wells in process, 4.0 authorised for expenditure Northern said it expects the assets to be
or permitted net wells and 40.8 risked net future immediately self-funding at closing, which is
development locations. The wells’ operators anticipated to occur in the first quarter of 2022.
PROJECTS & COMPANIES
ConocoPhillips not deterred by legal
challenges to Alaska’s Willow project
ALASKA CONOCOPHILLIPS is pushing ahead with its decision (FID) on the project next year.
Willow project on Alaska North Slope, unde- Meanwhile, ConocoPhillips is also poised to
terred by recent legal challenges. start production at another project on the west-
Speaking at the Resource Development ern North Slope, the GMT-2 field, according to
Council for Alaska’s annual conference, Cono- Lelarge. ConocoPhillips has invested more than
coPhillips’ manager for North Slope asset $1bn into that project and estimates that it could
development, Vincent Lelarge, reiterated the produce 35,000-40,000 barrels per day (bpd) of
company’s commitment to Willow. He said oil.
ConocoPhillips was working through the legal If Willow is developed, it will contribute even
process and the issues that were identified more production, having been estimated to hold
through a US District Court ruling that had about 600mn barrels of recoverable oil and to
overturned the approval for Willow. Addition- produce over 160,000 bpd. It would be the west-
ally, he said the company had not lost time in its ernmost operating oilfield on the North Slope.
schedule for the project despite the court ruling. The push by ConocoPhillips to develop Wil-
The District Court ruling in August found low and other North Slope fields comes as Alas-
that approvals issued for Willow by the admin- ka’s oil production continues to fall. The state’s
istration of former US President Donald Trump output rose above 2mn bpd in the late 1980s, but
were based on flawed environmental analysis averaged just 409,000 bpd in August, the latest
and must be reconsidered by federal agencies. month for which data are available, according
Despite this, Lelarge said ConocoPhillips was to the US Energy Information Administration
continuing its engineering planning and cost (EIA), continuing a slow, steady decline that has
analysis work in anticipation of a final investment been underway for decades.
P10 www. NEWSBASE .com Week 46 18•November•2021
