Page 10 - NorthAmOil Week 21 2021

NorthAmOil INVESTMENT NorthAmOil

Oasis to exit Permian Basin

US OASIS Petroleum announced last week that it “The decision to exit the Permian Basin while
had struck a series of deals to sell its entire posi- building scale in the Williston Basin is funda-
tion in the Permian Basin for a combined total mentally based on aligning company resources
of up to $481mn, depending on oil prices. The with our core competitive strengths and strategic
transactions will turn the company into a pure focus of building a sustainable enterprise which
play producer focused on the Williston Basin, generates significant free cash flow [FCF] for the
which contains North Dakota’s Bakken tight oil benefit of the company and shareholders,” said
play. Oasis’ CEO, Danny Brown. He added that the
The total consideration consists of $406mn at Permian position had been “difficult to scale”
closing and up to three $25mn annual contingent but that the company would now be able to focus
Oasis is building scale payments in 2023, 2024 and 2025 if West Texas its attention on driving value from its Williston
in the Williston Basin in Intermediate (WTI) averages over $60 per barrel acreage.
North Dakota. in each of these years, Oasis said. The company The Williston Herald noted that Oasis was
added in its May 20 statement that the primary selling its Permian position for less than half
deal was expected to close around June 30, while the price it paid to enter the basin in 2017. The
two smaller transactions had already closed. company paid an average of $46,000 per acre
The transactions come after Oasis agreed ear- ($11.5mn per square km) that year when it
lier in May to buy Diamondback Energy’s Willis- bought 20,300 net acres (82 square km) in the
ton Basin assets for $745mn. Permian-focused Permian’s Delaware sub-basin for $946mn that
Diamondback had only recently acquired those year. At the time, analysts said that was the high-
assets through its purchase of QEP Resources est price paid for a position in the Permian.
in March, but moved immediately to offload its But Brown said that given the challenges
non-core operations. Meanwhile, Oasis is mov- Oasis had encountered with building scale
ing in the opposite direction and offloading Per- across its Permian position, the company was
mian acreage while growing its Williston Basin happy with the valuation it was receiving to exit
footprint. the basin.™

PROJECTS & COMPANIES

Canadian oil and gas group

drops “oil” from name

CANADA THE Canadian Association of Oilwell Drilling suggested that it could also play a role in the grow-
Contractors (CAODC), the country’s oldest oil ing carbon capture and storage (CCS) industry.
and gas trade association, unveiled a new brand “The demand for energy has never been
and mandate this week, including the removal higher, and the global marketplace has set a
of the word “oil” from its name. It will now be mandate for not only low carbon, renewable,
known as the Canadian Association of Energy clean alternatives, but for responsible and ethical
Contractors (CAOEC). processes throughout the production lifecycle,”
The change illustrates the group’s willingness the CAOEC’s president, Mark Scholz, said in a
to embrace the energy transition and attempt to message to member companies.
attract members from a wider variety of fields, The group is following in the footsteps of
not just those involved in oil drilling. It comes various other companies that have dropped the
as Canada’s oil and gas industry is increasingly word “oil” from their names in recent years or
under pressure – both domestically and inter- rebranded with a focus on a wider variety of
nationally – to decarbonise and shift to new, energy sources. And CBC News cited a politi-
cleaner sources of energy. cal science professor at the University of British
The group’s members have already approved Columbia in Vancouver, Kathryn Harrison, as
the name change, though CBC News suggested saying “energy” often served as a euphemism
that several did this grudgingly, out of recogni- for oil and gas, and did not necessarily signify a
tion that the change was probably necessary even change in a given organisation’s operations.
though they did not necessarily like it. Indeed, accusations of token gestures and
The CAOEC acknowledged its members’ con- “greenwashing” have become relatively com-
cerns, but argued that the new mandate would monplace in the industry. The CAOEC will
broaden the organisation as the world looks at a need to prove that it can actually attract mem-
wider variety of future energy sources, including bers from beyond oil and gas if it is to avoid
LNG, hydrogen and geothermal. The group has similar accusations.™

P10 www. NEWSBASE .com Week 21 27•May•2021