- NOG enters into agreement to acquire a 36.7% working interest in a stacked pay, six-zone development project (the “Mascot Project”) in the core of the Midland Basin for $330 million
- Acquisition includes producing properties and associated midstream assets, plus 62 gross in-process and future wells in Midland County, Texas, with sub-$40 per barrel average breakevens
- Average production of 6,450 Boe per day (2-stream, ~80% oil) expected for 2023
-
Clear line of sight to significant free cash flow generation with 22.8
net undeveloped and in-process locations, all scheduled to be developed
over the next two years
- ~$150 million of expected 2023 unhedged cash flow from operations at strip pricing as of October 13, 2022 (~2.2x transaction multiple)
- ~$300 million of unlevered free cash flow expected through 2025 (inclusive of cash flows received from effective date but prior to closing)
- Transaction expected to be significantly accretive to key financial metrics
- Future wells will be developed under a joint operating agreement with defined controls and governance, providing strong alignment
- NOG has hedged a substantial portion of the expected production
- Acquisition to be financed with cash
Comments:
- Devon is the fastest growing oil company (operator).
- one wonders if NOG might be the fastest growing oil company (non-operator).
- $330 million / 6,450 boepd = $50,000 / flowing boepd; but incredibly more expensive if NOG is only getting 36.7% of that
No comments:
Post a Comment