QEP Resources has scrapped a previously announced deal worth up to $1.725bn to sell its assets in the Williston Basin in the US to Vantage Energy Acquisition.
Image: QEP Resources, Vantage terminate Williston Basin assets deal. Photo: courtesy of Dani Simmonds/Freeimages.com.
The deal was terminated on a mutual basis owing to the deterioration in commodity prices and also as the closing conditions were unlikely to be satisfied, said QEP Resources.
The Colorado-based oil and gas company said that it will continue to operate and develop the assets in the Williston Basin, including its South Antelope and Fort Berthold leaseholds.
As per the agreement signed in November 2018, Vantage Energy Acquisition, through its subsidiary Vantage Acquisition Operating Company, was to acquire more than 100,000 net acres, which at that time had a production of 46,000 barrels of oil equivalent (Boe) per day.
Vantage Energy Acquisition, which was to be renamed as Vantage Energy, upon closing of the deal, would have added 102,800 net acres to its portfolio, thereby creating a large-scale, pure-play Williston Basin operator with strong free cash flow and low-risk growth opportunities. The Williston Basin assets involved in the deal are located in the North Dakota and Montana states.
QEP Resources at the time of announcing the deal said that it will use the proceeds from the sale of the Williston Basin assets to fund the development of its core Permian assets apart from reducing its debt and return cash to its shareholders as part of a share repurchase program.
In another development, the oil and gas company has launched a review of strategic alternatives to maximize shareholder value, the result of which could be a merger or sale of the company or other transaction involving it or its assets.
The company said that it plans to engage in talks with various parties, including Elliott Management, that have shown interest in a potential transaction with it.
QEP Resources also announced that owing to the trimming down of its operational footprint during the last 12 months, it has reassessed its organizational requirements and is now looking to reduce its general and administrative expense significantly by about 45% compared to last year to ensure its cost structure is competitive with industry peers.
The company said that most of the reductions will come into effect during the first half of this year.