Page 6 - NorthAmOil Week 46 2022

NorthAmOil INVESTMENT NorthAmOil

Diamondback to acquire

Lario Permian for $1.5bn

PERMIAN BASIN OIL and gas producer Diamondback Energy is Diamondback expects to reduce operated rig
on a buying spree. It has agreed to purchase all count on the Lario acreage from two currently to
leasehold interest and related assets of Lario Per- one or less post-closing for 2023 development.
mian, a subsidiary of Lario Oil & Gas, for $1.5bn In mid-October, Diamondback had said it
in cash and stock. The deal includes 4.18mn would acquire all leasehold interests and related
shares of Diamondback common stock and assets – in the Midland Basin – from FireBird
$850mn of cash. Energy for $1.6bn in cash and stock. FireBird’s
The cash portion of the transaction is 25,495 hectares had an estimated production, at
expected to be funded through a combination of the time of the closing of the deal, of some 17mn
cash on hand, borrowings under Midland-based bpd of oil.
Diamondback’s credit facility and/or proceeds “With over 350 locations adjacent to our
from an offering of senior notes. current Midland Basin position, this asset adds
The closing date is anticipated to be January more than a decade of inventory at our antici-
31, 2023. pated development pace,” Stice said at the time.
Lario’s shale assets in the northern Permian The FireBird deal added “more than a decade
Basin consist of some 10,117 gross hectares with of inventory” at Diamondback’s anticipated rate
estimated 2023 production of about 18,000 bar- of development, Stice added.
rels per day (bpd) of oil. The purchase was the largest deal for Dia-
“When combined with our pending FireBird mondback since its purchases of QEP Resources
acquisition, we will grow our Midland Basin and Guidon Operating in 2020 for a total of
footprint by approximately 83,000 net acres, $3.2bn including debt. At that time, during the
add 500 high quality drilling opportunities,” said pandemic, oil prices were low, spurring a wave
Diamondback’s CEO, Travis Stice. of consolidation.™

APA reportedly considering selling

acreage in Southeast Texas

TEXAS APA, formerly known as Apache, is reportedly Nasdaq-traded APA announced an increase in
considering selling around 212,000 acres (858 the company’s dividend on common shares from
square km) of shale assets in Southeast Texas. an annualised rate of 50 cents per share to $1.00
The assets consist of Eagle Ford and Austin per share.
Chalk acreage, Reuters reported, citing a docu- Early in November, APA announced that
ment it had seen. production in the US had exceeded expecta-
Sources familiar with the deal said the oil- tions, driven by strong performance across the
and gas-producing assets are valued at $450- Permian Basin.
500mn. They added that APA may ultimately For the third quarter 2022, APA announced
decide not to sell the assets. that it had generated net cash from operating
November production from the acreage is activities of $1.104bn, adjusted EBITDAX – a
estimated at 15,000 barrels of oil equivalent per measure of profitability – of $1.690bn, and free
day (boepd), said the document. APA, based in cash flow of $609mn.
Houston, declined to comment. APA’s third-quarter earnings were $651mn,
The company is increasingly concentrating or $1.97 per diluted share, for the quarter.
more on West Texas and the Permian Basin. In “Global production was in line with expecta-
the second quarter it had announced “mixed tions, as excellent Permian Basin performance
results” from its Austin Chalk delineation offset weakness in North Sea production that
programme. was heavily impacted by unplanned downtime,”
High commodity prices – following the start said APA’s CEO and president. John Christmann.
of Russia’s war in Ukraine – have pushed pub- In the US, APA had 218,826 barrels per day
licly traded oil and gas companies to sell non- (bpd) of oil in production in the quarter, of
core assets and reinvest the cash or return to which 33% was oil, 30% NGL and 37% natural
shareholders. gas. It also operates in the UK North Sea, Suri-
In mid-September, the board of directors of name and Egypt.™

P6 www. NEWSBASE .com Week 46 17•November•2022