Minnesota-based Northern Oil and Gas has agreed to acquire producing assets in the Williston Basin of North Dakota from an undisclosed seller.
Separately, Northern has entered into another negotiated exchange agreement with an institutional holder (the “Investor”) of its 8% senior unsecured notes due 2020 (the “Notes”).
Acquisition includes current estimated production of 165 barrels of oil equivalent per day and over 1,900 acres in the Pronghorn area of the Williston Basin
Exchange agreement will result in a debt reduction of $10 million par value of Notes, in exchange for common stock
Combined with the other exchange transactions announced over the last two weeks, Northern has now entered into agreements to retire $53.8 million of its remaining Notes
Northern CEO Mike Reger said: “This acquisition is another indicator of our continued success in pursuing accretive acquisitions and our competitive advantage in the Williston Basin.
“Our capital allocation process is driving strong cash flow growth. We continue to see numerous acquisition opportunities, while at the same time we continue improving our balance sheet and reducing our cash expenses.”
The acquired acreage is 100% held by production and focused in the Pronghorn area, operated by Whiting Petroleum and Continental Resources.
Total consideration is $5 million in cash (subject to closing adjustments) and 500,000 shares of Northern common stock, with the acquisition expected to close on or about August 1, 2018.
The new exchange agreement represents a debt reduction of $10,000,000 par value of Notes. In exchange, Northern will issue 3,338,020 shares of common stock to the Investor.
In exchange for certain guarantees, the Investor has agreed to a nine month lock-up period, subject to certain exceptions.
Source: Company Press Release