Northern Oil and Gas Buys Williston Basin Acreage
Northern Oil and Gas Inc. plans to acquire approximately 320 acres of core Williston Basin properties from WPX Energy for $1.5 million in cash, according to a company statement. Closing is expected on July 1, 2020.
Since signing, Northern has received nine gross well proposals to fully develop the unit consisting of 2.1 net wells.
The assets are expected to produce 1,200 barrels of oil equivalent per day and produce an estimated $11.3 million of unhedged cash flow from operations in 2021 at the current commodity pricing strip as of June 5. Including development capital and acquisition costs, Northern expects a payback period of under 1.5 years.
“We have consistently believed this environment would create opportunities for our shareholders in 2020 and beyond, and budgeted for opportunities like this,” commented Northern’s Chief Operating Officer, Adam Dirlam.
“This acquisition, while modest in size, is in the heart of the core with one of the top operators in the Williston Basin and highlights Northern’s competitive advantage as an actively managed non-operator. We expect this deal to be materially accretive to cash flow in 2021 yet it represents no additional capital spending to our stated 2020 budget.”
Northern has a core area of focus in the Williston Basin Bakken and Three Forks play in North Dakota and Montana.
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