QEP Energy, a subsidiary of QEP Resources, has agreed to offload its assets in the Williston Basin in the US to Vantage Acquisition Operating Company, a subsidiary of Vantage Energy Acquisition, for a sum of up to $1.725bn.
Image: Vantage Energy to acquire Williston Basin assets from QEP Resources. Photo: courtesy of Zbynek Burival on Unsplash.
The purchase price for the Williston Basin assets is made up of $1.65bn in cash and contractual rights of up to $50m and $25m in Vantage common stock for QEP Energy, based on certain performance-based conditions.
The Williston Basin assets involved in the deal are located across North Dakota and Montana, which includes the South Antelope and Fort Berthold leasehold and several mineral interests.
Upon completion of the deal, Vantage Energy Acquisition will be renamed as Vantage Energy, and will become a publicly traded oil and gas exploration and production company with operations focused in the core of the Bakken Formation.
The assets to be acquired by Vantage comprise over 100,000 net acres and currently have a production of 46,000 barrels of oil equivalent (Boe) per day. Vantage Energy will be adding 102,800 net acres, which are yielding 81% and 79% net revenue interest from South Antelope and Fort Berthold, respectively.
QEP Resources plans to utilize the proceeds from the sale of the Williston Basin assets to fund the ongoing development of its core Permian assets in addition to lowering its debt and return cash to its shareholders under a share repurchase program.
QEP chairman, president and CEO Chuck Stanley said: “The Williston Basin assets have been a significant contributor to QEP for many years and were critical in our pivot towards a more oil-focused portfolio.
“This transaction marks an important milestone in simplifying our asset portfolio as we continue on our path to becoming a Permian pure-play operator.”
The transaction is expected to help Vantage Energy create a large-scale, pure-play Williston Basin operator having strong free cash flow and low-risk growth opportunities.
Vantage Energy chairman, president and CEO Roger Biemans said: “Since our IPO, the Vantage team has evaluated opportunities across North America with a relentless focus on resource quality and equity value creation.
“With this acquisition, we believe we have delivered on our IPO goals by acquiring assets in the core of a world-class oil resource play with a strong production base and significant projected free cash flow growth for years to come.”
The transaction is expected to be closed late in the first quarter or early in the second quarter of 2019.