Page 6 - NorthAmOil Week 46 2022
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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
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