Learn more about Hart Energy Conferences
Get our latest conference schedules, updates and insights straight to your inbox.
[Editor's note: This story was updated at 10:40 a.m. CST Aug. 2 to include information on previously undisclosed sellers.]
Two days after selling its Pinedale Anticline Field, QEP Resources Inc. (NYSE: QEP) pulled a Permian Basin acquisition out of its sleeve in what the company says will be a tit-for-tat pairing of deals totaling nearly $1.5 billion.
QEP said July 26 it will purchase 13,800 net acres in Martin County, Texas, close to its Midland acreage for an aggregate price of $732 million. The company will acquire the acreage, which almost doubles QEP’s Midland position, from JM Cox Resources LP and Alpine Oil Co., according to filings with the Securities and Exchange Commission.
The deals continue QEP’s “pivot towards a more oil-focused portfolio,” said Chuck Stanley, chairman, president and CEO.
QEP reached an agreement to sell its Pinedale assets in Wyoming, announcing the $740 million deal on July 24. The company also closed a $37.5 million divestiture in Wyoming on June 30, bringing its Wyoming exit proceeds to $777.5 million.
“We expect to fund the Permian Basin acquisition with proceeds from our Pinedale asset sale and with cash on hand. The Pinedale asset sale and the Permian Basin acquisition will be structured as a like-kind-exchange, and we expect to be able to defer income taxes incurred on the gain on sale,” Stanley said.
Nearly all of the acquired acreage is HBP to the Wolfcamp Formation or deeper and, pro forma increases QEP’s position to 43,000 net acres.
The Martin assets offer more than 730 potential horizontal drilling locations, with 60% of the inventory capable of supporting 10,000-ft laterals, the company said. The company said the inventory targets the Middle Spraberry, Spraberry Shale, Wolfcamp A and Wolfcamp B.
“The acquisition will significantly expand our Permian Basin net acreage by almost 50% and our potential drilling inventory by over 60% to nearly 1,900 potential horizontal drilling locations, in the core of the northern Midland Basin,” Stanley said.
QEP said it expects to close the deal by October. The company will discuss its earnings and the transactions during a call at 9 a.m. ET on July 27.
Darren Barbee can be reached at dbarbee@hartenergy.com.
Recommended Reading
For Sale, Again: Oily Northern Midland’s HighPeak Energy
2024-03-08 - The E&P is looking to hitch a ride on heated, renewed Permian Basin M&A.
E&P Highlights: Jan. 8, 2024
2024-01-08 - Here’s a roundup of the latest E&P headlines including the second biggest deepwater gas find of 2023 and new contract awards.
Sinopec Brings West Sichuan Gas Field Onstream
2024-03-14 - The 100 Bcm sour gas onshore field, West Sichuan Gas Field, is expected to produce 2 Bcm per year.
Orange Basin Serves Up More Light Oil
2024-03-15 - Galp’s Mopane-2X exploration well offshore Namibia found a significant column of hydrocarbons, and the operator is assessing commerciality of the discovery.
Equinor Receives Significant Discovery License from C-NLOPB
2024-02-02 - C-NLOPB estimates recoverable reserves from Equinor’s Cambriol discovery at 340 MMbbl.