NOG - Northern Oil & Gas Earthstone Energy to buy Delaware Basin assets for combined $1.5B

2023-06-15 07:57:11 ET

Earthstone Energy ( NYSE: ESTE ) said Thursday it agreed to acquire Novo Oil & Gas Holdings, a privately-held Delaware Basin-focused E&P company backed by EnCap Investments, for $1.5B.

Concurrently, Northern Oil and Gas ( NYSE: NOG ) will acquire one third of the Novo oil and gas assets for $500M, resulting in a $1B net purchase price for Earthstone's ( ESTE ) retained two-thirds interest.

With significant production volumes from the Novo acquisition, Earthstone ( ESTE ) said its expects near-term production levels to surpass 135K boe/day and for free cash flow to increase significantly.

Earthstone ( ESTE ) expects Q4 2023 production will increase by 30K-35K boe/day (37% oil) relative to prior FY guidance of 96K-104K boe/day, with no change to full-year capital spending guidance of $725M-$775M.

For H2 2023, Northern Oil & Gas ( NOG ) expects average production of 11.5K boe/day (53% oil) net to the company and ~$20M of capital expenditures.

"Novo is NOG's largest transaction to date and is among the most accretive, with significant high-quality, long-dated inventory,," Northern ( NOG ) CEO Nick O’Grady said.

More on Earthstone Energy:

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• Analysis: Earthstone Energy: Smooth Sailing
• Stock price return: Down 2% YTD, down 33% in the past 12 months

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