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Wednesday, November 7, 2018

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:
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

6 comments:

  1. What is your take on Vantage Energy? Do you think they will drill anymore or keep everything as it is?

    ReplyDelete
    Replies
    1. I have no idea. Their webpage is essentially "blank." The trading symbol appears to be VEAC despite the information above suggesting the trading symbol would be VEI. Vantage is still not listed as an operator in North Dakota (NDIC - well search). When I get caught up, this looks like a good one to bring up again on the blog and see if others know anything about it.

      Delete
  2. I was asking because i have mineral rights in the Grail and getting payments off of nine wells.

    ReplyDelete
    Replies
    1. I will come back to VEAC later. Getting caught up now.

      Delete
    2. Thank you. I check daily on your site to see what is going on in the Bakken. I used to work in the oilfields there from 1980 to 1985, have family that I try and go see whenever I can.

      Delete
    3. I appreciate the kind words about the blog. I've learned a lot from readers over the years. I am thrilled that you enjoy checking up on the Bakken .. it's a fascinating story.

      Delete

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