Vitesse to Acquire Williston Basin Producer Lucero

Vitesse Energy Inc. has signed a deal to acquire Lucero Energy Corp., an oil and gas producer focused on the North Dakota side of the Williston Basin, in an all-stock transaction with a diluted equity value of $222 million.
Subject to approval by Lucero shareholders and regulatory clearance in Canada and the United States, each outstanding common share held at Lucero will be exchanged for a 0.01239 share of Vitesse common stock. Vitesse expects to issue nearly 8.18 million shares of common stock under the transaction, expected to close by the second quarter of 2025, according to a joint statement online.
Contributing over 65 producing wells, the acquisition by Greenwood Village, Colorado-based well investor Vitesse will provide “an operational component to its strategy”, the statement said.
“Lucero operations provide flexibility in future capital spending with 2 gross (1.9 net) drilled uncompleted wells and up to 50 gross (25 net) locations in the core of the Bakken”, the statement added. Calgary, Canada-based Lucero recorded a daily average net production of 6,400 barrels of oil equivalent from the Bakken Formation in the third quarter.
“Vitesse expects to promptly hedge a significant portion of the commodity risk associated with this transaction through 2026 and has hedged a meaningful portion of its own production into 2026”, the statement said.
“Vitesse historically hedges a portion of its expected oil production volumes to increase the predictability and certainty of its cash flow and to help maintain a strong financial position to support its dividend. Vitesse does not currently have hedges in place on its expected natural gas production volumes”.
Vitesse plans to raise its cash dividend from $2.1 to $2.25 per share on an annualized basis if the acquisition is successful.
“Upon closing, this acquisition strengthens Vitesse’s financial position with expected near-term Net Debt to Adjusted EBITDA ratio of ~0.3x”, the statement said. Lucero had no outstanding debt, it said.
Vitesse intends to use part of the $56 million cash held by Lucero as of the third quarter to pay down borrowings under its revolving credit facility.
Vitesse’s board will increase to nine members with two nominees from Lucero. The two are Lucero director Gary Reaves, managing partner at First Reserve Management LP, which owns 37 percent of Lucero, and Lucero chair M. Bruce Chernoff, who owns 22 percent of Lucero.
“We are excited to add an operated leg to our strategy, while keeping our emphasis primarily on non-op”, said Vitesse chair and chief executive Bob Gerrity. “This opens the door to acquiring operated and non-operated packages that are accretive to our dividend, while giving us proportionately more control over our future capital spending.
“In addition, this transaction supports our ability to pay the dividend, and the anticipated increased liquidity furthers our ability to make future acquisitions”.
Lucero president and chief executive Brett Herman commented, “Combining with Vitesse will provide Lucero shareholders with immediate value for their investment and the opportunity to participate in the future upside from ownership in a stronger, larger company with enhanced shareholder returns”.
“The transaction creates a unique oil weighted company with assets in the core of the Williston Basin exhibiting lower production declines, high operating netbacks, and strong capital efficiencies”, Herman added.
To contact the author, email jov.onsat@rigzone.com
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