Vital Energy has added additional working interests in producing assets associated from Henry Energy LP, Moriah Henry Partners LLC and Henry Resources LLC in a deal valued at $55 million.
Vital Energy said Dec. 21 that it would increase the company’s working interest in 45 wells by an average of 24%, increasing its estimated 2024 production by approximately 1,400 boe/d (57% oil). The transaction is expected to increase Vital Energy's 2024 free cash flow by approximately $20 million, furthering Vital Energy's deleveraging goals.
In September, Vital Energy acquired Henry Resources, Tall City and Maple Energy, adding 53,000 net acres for a total of $1.165 billion. The Henry portion of the deal was all equity for $517 million.
The Dec. 21 deal represents an exercise of tag-along rights by owners of certain assets in the Henry acquisition that enable Vital Energy to purchase and finance the assets on the same terms as the Henry purchase and sale agreement. The deal values Vital Energy’s shares at $54.96. Vital Energy funded the transaction through the issuance of 627,000 shares of its common stock and 595,000 shares of its 2% cumulative mandatorily convertible preferred securities.
"This transaction further demonstrates the opportunities provided by our increased scale in the Permian," Jason Pigott, president and CEO, said in a press release. "Our larger operating footprint across the Midland and Delaware basins continues to drive new efficiencies through bolt-on transactions that increase working interest or optimize our development plans by enabling longer laterals. As we successfully integrate these high-value acquisitions we expect to see continued gains in capital efficiency and stronger Free Cash Flow."
Recommended Reading
Ohio Oil, Appalachia Gas Plays Ripe for Consolidation
2024-04-09 - With buyers “starved” for top-tier natural gas assets, Appalachia could become a dealmaking hotspot in the coming years. Operators, analysts and investors are also closely watching what comes out of the ground in the Ohio Utica oil fairway.
Exclusive: Rockcliff CEO on $2.7B TGNR Deal, Value of Haynesville M&A
2024-04-10 - Rockcliff Energy CEO and President Alan Smith discusses the ups and downs of executing the transaction with TG Natural Resources and what's on the Rockcliff III radar, in this Hart Energy Exclusive interview.
An Untapped Haynesville Block: Chevron Asset Attracts High Interest
2024-04-03 - Chevron’s 72,000-net-acre property in Panola County, Texas is lightly developed for the underlying Haynesville formation — and the supermajor may cut it loose.
Aethon Cuts Rigs but Wants More Western Haynesville Acreage
2024-03-31 - Private gas E&P Aethon Energy has drilled some screamers in its far western Haynesville Shale play—and the company wants to do more in the area.
The Answer to Curbing Permian Associated Gas? More M&A
2024-04-03 - Consolidation will result in less oil production, and therefore less associated gas, as fewer wells are produced, an energy analyst says.