Northern Oil and Gas expands in Permian Basin
US producer Northern Oil and Gas (NOG) closed its takeover of non-operated Permian basin assets from Veritas Energy on January 31, the company said in a statement.
The company first announced the deal to acquire approximately 11,500 barrels of oil equivalent/day of production in November last year for $406.5mn in cash and around $1.9mn common equity warrants, with an exercise price of $28.30/share. The closing settlement was $419.4mn in cash with about $1.94mn common stock warrants.
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“The Veritas acquisition caps an incredible twelve months for NOG,” said NOG CEO Nick O’Grady.
“We have grown significantly, diversified into multiple basins, substantially de-levered the balance sheet, and instituted a meaningful shareholder return program," he said. "The Veritas acquisition, which is the largest in NOG’s history, furthered all of these goals and represents a high-quality addition to our asset base. We remain dedicated to building a low-leverage, diversified company with growing cash returns for our shareholders.”
The effective date for the transaction is October 1, 2021. NOG plans to hedge a substantial portion of the expected oil and natural gas production at the acquired assets for 2022 and introduce additional hedges to cover volumes in 2023 and 2024.