SM Energy, NOG Close Acquisition of Uinta Basin Assets

SM Energy Company and Northern Oil and Gas, Inc. (NOG) have closed the acquisition of Uinta Basin assets from XCL Resources, LLC.

The transaction includes the exercise of its option to acquire certain additional assets adjacent to XCL Resources' position, SM Energy said in a news release.

SM Energy said the acquisitions add approximately 63,300 net acres, with an initial estimate of 465 net locations normalized to 10,000 foot laterals. The company gained estimated net proved reserves of approximately 110 million barrels of oil equivalent.

SM Energy President and CEO Herb Vogel said, "We are excited to add a third core area of very high-quality assets to the SM portfolio. We look forward to welcoming new employees to the SM team from XCL Resources and Altamont Energy and to working in our new Utah communities. The Uinta Acquisitions add significant scale and long-term value creation opportunity for SM Energy via high-quality, oily stacked pay with outstanding well economics”.

The acquisitions totaled $2.1 billion net to SM Energy’s interest and have an effective date of May 1, 2024. The final purchase price will be subject to customary post-closing purchase price adjustments.

For NOG, the transactions provide it with over a decade of Tier 1 inventory across approximately 15,800 net acres in the Uinta Basin with around 116 net underwritten undeveloped locations and additional exploration upside potential, the company said in a news release. SM Energy will become the operator of substantially all the assets.

In connection with the transaction, NOG and SM entered into cooperation and long-term joint development agreements.

At closing, NOG paid $511.2 million in cash, funded in part by a $25.5 million deposit paid at signing in June. The closing settlement includes the purchase of the Altamont assets, is net of preliminary and customary purchase price adjustments and remains subject to post-closing settlements between the parties.

In June, SM Energy and NOG announced the acquisition of the Uinta Basin oil and gas assets of XCL Resources for an unadjusted acquisition price of $2.55 billion. The assets are located primarily in Uintah and Duchesne Counties, Utah.

In August, NOG exercised its option to acquire a 20 percent undivided stake in Altamont Assets in partnership with SM Energy for a purchase price, net to NOG, of $17.5 million in cash.

NOG’s initial estimates are for approximately 18 net undeveloped locations on the properties and approximately 250 barrels of oil equivalent per day (boepd) of expected production. Altamont was previously under contract with XCL Resources LLC and was offered to NOG and SM under a right of first refusal in connection with the XCL asset acquisition, according to an earlier news release.

Denver, Colorado-based SM Energy operates in the Midland Basin in West Texas, the Maverick Basin in South Texas, and the Uinta Basin in northeast Utah. Its strategy is to focus on high-quality, Lower 48 oil and natural gas producing assets, growing its inventory organically with top-tier economic drilling, completion, and production opportunities.

NOG describes itself as a real asset company with a primary strategy of acquiring and investing in non-operated minority working and mineral interests in the premier hydrocarbon producing basins within the contiguous USA.

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