Monday, February 25, 2019

VEAC Announces Termination Of Acquisition Of Williston Basin Assets From QEP -- February 25, 2019


February 28, 2019: see update here.

February 25, 2019: a reader asked what I thought might happen next with QEP assets in the Williston Basin now that the VEAC deal fell through. I have no dog in this fight; I am not invested in any company mentioned in this post. But these are my thoughts:

QEP would still be interested in selling these assets; to some extent these assets are "stranded" as far as QEP is concerned. The Grail is one small oil field out in the middle of nowhere as far as QEP is concerned. Sort of a nuisance to manage from afar, I would think.

We now know the starting point:
  • 120,000 acres
  • $1.7 billion 
  • $15,000/acre
Since last year, one can argue that the value of these mineral acres has decreased based on price of WTI; glut of light oil; etc. On the other hand, the USGS survey, if and when it ever comes out, will probably suggest that the EUR of the Grail oil field will be greater than originally estimated. But insiders (oil companies) would already know that -- well ahead of the USGS. So, perhaps, a new buyer could swing a slightly better deal (for the buyer).

Whiting or CLR seem to be the best fit. Any of the others (which I cannot mention because I am invested in some of the others) could be interested, but Whiting and CLR simply seem to me to be the best fit.

At 400,000 acres (plus/minus) for Whiting, and 800,000 acres (plus/minus) for CLR, an additional 120,000 acres of a really, really good location would really move the needle.

But for $1.5 billion it would take a Whiting, a CLR, or one of the other larger companies already in the Bakken (about six of them) to pull it off. CLR has made a big deal about reducing their debt, suggesting they don't want to start over again, with a trend toward more debt.

I'm sure readers would be curious what others might think. For me, it's all idle chatter, but it is interesting to think about it.

Original Post
Received as a comment just moments ago:
From Vantage Energy site DENVER, Feb. 20, 2019 (GLOBE NEWSWIRE) -- Vantage Energy Acquisition Corp. (“VEAC”) (NASDAQ: VEAC, VEACU, VEACW), an energy-focused special purpose acquisition company, today announced that, given the deterioration in commodity prices and that it was unlikely that the conditions to closing would be satisfied, VEAC and QEP Energy Company, a wholly owned subsidiary of QEP Resources, Inc. (collectively, “QEP”), have entered into an agreement to terminate the pending acquisition by VEAC of QEP’s Williston Basin assets under the Purchase and Sale Agreement dated November 6, 2018, effective immediately.
The original announcement for an agreement was made last November, 2018.

Apparently the announcement to terminate the agreement was made last week, February 20, 2019.

I had missed the formal announcement / press release, so whoever sent me the information, thank you.

At the blog, here is the post from November 7, 2018. Back-of-the envelope showed the deal to be worth as much as $15,000 / acre.


  1. On hearing of this news what do think QEP will do now?

    1. I was surprised to hear the announcement of the original deal in 2018, but thought it a good "fit" for North Dakota and mineral owners.

      My hunch is that we won't see any movement/change in the Grail for a year (?). It takes a long time to put these deals together. I'll come back to this later; I have to pick up my granddaughter.

    2. I posted my thoughts here: