Oasis Petroleum to acquire Delaware Basin assets for $946m

Oasis Petroleum has signed an agreement to acquire 20,300 net acres in the Delaware Basin from Forge Energy for around $946m.

As per the deal, Oasis will make a cash payment of around $483m and issue 46 million shares of its common stock valued at about $463m.

The proposed acquisition comprises net acres across Loving, Ward, Winkler and Reeves Counties, Texas.

Last month, the assets produced around 3,500 barrels of oil equivalent (boe) per day.

Oasis Petroleum chairman and CEO Tommy Nusz said: “This accretive transaction more than doubles Oasis’s core net inventory and represents a unique opportunity to acquire a highly complementary asset to Oasis’s premier Williston Basin acreage that positions the company to further capitalise on its operational strengths.

“Our new Permian assets deliver a consolidated position in the deepest and highest pressured part of the Delaware in the heart of the oil window.

“The seller and offset operators have materially de-risked this position with recent well performance across the Wolfcamp and Bone Spring formations, giving us additional confidence in asset quality and well performance.”

The transaction will give Oasis access to 601 gross operated locations and 507 net core locations targeting the Wolfcamp A, B, and C, and the Bone Spring formations, with additional upside from other intervals in the column.

Around 16 to 20 gross wells are expected to be drilled within the acreage and six to eight gross wells to be completed with a capital programme of around $100m in 2018.

Oasis also aims to sell non-core Williston Basin acreage up to $500m in 2018.