The acquisition includes 1.1 initial net wells that are expected to spud in late 2020 or early 2021
Northern will acquire stake in 66 net acres. (Credit: Gerd Altmann from Pixabay.)
Northern Oil and Gas has announced the acquisition of non-operated interests in the Delaware Basin acreage from an undisclosed seller.
The company will acquire stake in 66 net acres, on which 1.1 initial net wells have been proposed in Lea County, New Mexico. EOG Resources is the operator of the assets.
Northern estimates that the total acquisition costs as well as the initial development costs on the 1.1 net wells to be nearly $11.9m.
Expected to be spud in late 2020 or early 2021, the wells will be turned in line from the second quarter of 2021.
Peak production from initial wells expected to be 1,400boe per day
Northern expects the initial wells to record a monthly peak production of approximately 1,400boe per day late in the second quarter of 2021.
In its operations update, the company said that it has seen significant improvement in operations throughout the third quarter of 2020.
Northern CEO Nick O’Grady said: “We have been actively building data in the Permian Basin for two years.
“The 2020 downturn in the energy sector has made the Permian Basin competitive for the first time, inclusive of acreage costs, on a full cycle return basis with our Williston Basin program.
“Coupled with Northern’s Ground Game acquisitions in the Williston, this increased opportunity set should add additional breadth to our strategy as the natural consolidator of non-operated working interests.”
In 2018, the company announced that the acquisition of producing assets in North Dakota, At the time of the acquisition, the assets had production capacity of more than 4,100boe per day.