Northern (NOG) Closes Forge Delaware Basin Acquisition Deal
Northern Oil and Gas Inc. (NOG) closed its previously announced deal of acquiring Delaware Basin assets. NOG, together with another independent operator Vital Energy, completed the purchase of certain non-operated properties of Forge Energy II (a privately held upstream company) on Jun 30, 2023.
NOG and Vital also signed joint operating agreements in connection with the transaction, including a multi-year development strategy for the Forge assets. Per the terms of the deal, Northern made a cash payment of $167.9 million at closing.
The properties, situated mainly in Ward and Reeves counties, TX, include some 10,200 net acres, 30.5 producing wells and 2.3 wells-in-progress to go with around 20 undeveloped sites. The Delaware Basin assets are expected to produce an average of 3,750 barrels of oil equivalent per day (79% oil) in the second half of 2023. With the acreage’s low operating costs, this would require just $17 million in capital spending this year.
While Vital Energy operates the assets, the acquisition adds to Northern’s position in the Permian Basin and is expected to be accretive to multiple metrics. Adding to the transaction’s value, a major portion of the output from the acquired fields has hedges in place through 2026.
Zacks Rank & Key Picks
NOG currently carries a Zack Rank #3 (Hold).
Some better-ranked stocks for investors interested in the energy sector are Evolution Petroleum Corporation EPM, Global Partners LP GLP and RGC Resources Inc. RGCO. While both Evolution Petroleum and Global Partners sport a Zacks Rank #1 (Strong Buy), RGC Resources carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Evolution Petroleum is an independent energy company. It was formed to acquire and develop oil and gas fields and apply both conventional and specialized technology to accelerate production, particularly in low-permeability reservoirs. EPM has witnessed an upward earnings estimate revision for 2023 and 2024 in the past 60 days.
Global Partners is an adaptive distribution energy company that sources low-cost energy in bulk and transports products through its vertically integrated adaptive distribution network to wholesale, commercial and retail customers in New England. It has witnessed an upward earnings estimate revision for 2023 and 2024 in the past 60 days.
RGC Resources is a holding company that offers energy and associated products and services through its operational subsidiaries — Roanoke Gas Company and RGC Midstream, LLC. RGCO has thousands of customers through its natural gas distribution companies that serve the Roanoke Valley and Bluefield, Virginia and West Virginia areas.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Global Partners LP (GLP) : Free Stock Analysis Report
Evolution Petroleum Corporation, Inc. (EPM) : Free Stock Analysis Report
Northern Oil and Gas, Inc. (NOG) : Free Stock Analysis Report
RGC Resources Inc. (RGCO) : Free Stock Analysis Report
