QEP Exits The Williston Basin; Becomes Pure-Play Permian Producer -- November 7, 2018

Updates

February 25, 2019: deal terminated. VEAC won't be buying QEP's assets in the Williston Basin.

December 15, 2018: major update at this post. The Vantage purchase of QEP's Williston assets is scheduled to close on March 14th.

Original Post

Maybe the mineral owners should have voted to let QEP unitize the Helis Grail. But we will never know, will we.

A reader alerted me to this. Thank you very, very much.

QEP exits the Bakken. The story is everywhere. One link here. Data points:

• Vantage Energy buys
• Vantage Energy: a new publicly traded company
• Denver-based Vantage Energy
• will focus on the Williston Basin, "including" the Bakken 
• meanwhile, QEP will become much more of a pure-play exploration and production firm focused almost exclusively on the Permian
• $1.7 billion
• acreage not mentioned in this article
• from "Bakken operators", last entry:
• about 120,000 acres in the Bakken
• $1.7 billion / 120,000 = $15,000 / acre (rounded)

From that post:

• March, 2018: will exit the Bakken and Uinta; looks like it becomes a pure Permian play
• 8 rigs; operational update, June 3, 2013;
• QEP Midstream Partners, IPO filing, May, 2013; Uinta, Bakken
• August 23, 2012: acquires 27,600 net acres from Helis, LLC, and Black Hills Corporation in deal worth $1.3 billion;  if accurate, then about 117,600 net acres in the Bakken;
• 4Q11 (Filloon): 90,000 net acres: most of it inside the reservation
• Three rigs; will add a fourth in 2012 (1Q12 report)
• 4Q11: 5,019 boepd 
• 4Q11 (Filloon): Most interesting: its proposed 10-well pad; first test of 5 MB and 5 TF from one pad
• Still natural gas heavy

Here we go, from MarketWatch:

Upon closing the transaction, Vantage Energy Acquisition Corp. will change its name to Vantage Energy Inc., which will be led by Mr. Biemans as Vantage's full-time Chairman, President and CEO. In addition to Mr. Biemans' leadership and the rest of the current Vantage team, Vantage expects to retain a significant portion of QEP's High Plains business unit team, including operations, engineering, geoscience, land, administrative and finance groups.

The transaction is subject to approval by VEAC shareholders and other customary closing conditions, and the new company will trade on the NASDAQ under the ticker "VEI" upon closing, which is expected to occur late in the first quarter or early in the second quarter of 2019.

The formation of Vantage creates a large-scale, pure-play Williston Basin operator with strong free cash flow and low-risk growth opportunities.

The acquired assets consist of more than 100,000 net acres and are currently producing at the rate of 46,000 barrels of oil equivalent per day. 

Let's do some quick comparison (market cap / enterprise value)

• VEI: $1.7 billion (pending) / $1.7 billion (pending)
• NOG: $1.153 billion / $1.6 billion
• OAS: $3.22 billion / $6.5 billion -- 66,000 bopd
• DNR: $1.44 billion / $4.92 billion

Comment:

• QEP was never a good fit for the Bakken
• I always wondered how/why QEP entered the Bakken
• when QEP entered the Bakken during the boom I was surprised
• QEP got "lucky" with an incredible Helis Grail
• now, it's time to move on
• VEI seems to be a better fit for the Bakken, what little I know about VEI