SM Energy, NOG To Acquire Uinta Basin Oil And Gas For $2.55 Bln

(RTTNews) - Thursday, SM Energy Co. (SM) announced an agreement to acquire 80 percent of the Uinta Basin oil and gas assets from certain entities linked to XCL Resources, LLC for $2.04 billion. An undivided 20 percent of the assets of XCL will be acquired by Northern Oil and Gas, Inc. (NOG) for $510 million.

Further to the transaction, SM will take charge of most of the assets, while NOG will be responsible for development through cooperation agreements.

The acquisition is expected to boost financial metrics, improve the asset portfolio, increase oil volumes, and extend the life of low-cost inventory. SM Energy predicts an 11 percent increase in its 2025 cash production margin, thanks to the higher oil content and lower operating costs in the Uinta Basin.

The company plans to finance the purchase using a combination of debt and existing cash. The acquisition is set to be effective on May 1, 2024, with the closure anticipated in September 2024, subject to standard conditions.