Vital Energy Grows Permian Footprint With Trio of Deals Valued at $1.17 Billion
The Oklahoma independent agreed to acquire the assets of three private companies in its quest to scale up in the Permian's Delaware Basin.
Tulsa-based Vital Energy is expanding its Permian Basin footprint with three new deals worth more than $1.17 billion.
The deals are with the affiliates of Henry Energy and Henry Resources, Tall City Property Holdings III, and Maple Energy Holdings, and are expected to close in the fourth quarter, Vital said on 14 September.
These acquisitions will increase the company's current production by about 35,000 BOED. Vital Energy, formerly known as Laredo Petroleum, will add nearly 53,000 net acres and proven reserves estimated at around 248 million BOE (44% oil) to its portfolio.
The company plans to ramp up operations by adding a drilling rig on the newly acquired acreage. It will employ a spot completions crew for about 1 month to finish four wells currently under development. By 2024, the company is anticipating an investment of $100–125 million in these assets, representing less than half the activity levels of the previous operators.
The pro forma scenario for Vital Energy implies a total net acreage of about 250,000 and an estimated average full-year 2024 production of roughly 112,000 BOED. The projected average full-year 2024 oil production is expected to increase by about 30% to 55,000 B/D.
The deals unlock about 150 gross high-value locations, further strengthening Vital Energy's position. With the projected four-rig development pace, they anticipate maintaining more than 8 years of oil-weighted inventory.
The deals include Vital Energy's purchase of Henry’s Midland and Delaware basin assets in an all-equity transaction consisting of 3.72 million common shares and 4.54 million shares of perpetual mandatorily convertible preferred securities, net of customary closing price adjustments.
Vital will also acquire all Delaware Basin assets previously held by Tall City Property Holdings III for $285 million in cash and common shares. Finally, Maple Energy Holdings will transfer all its assets in the Delaware Basin to Vital Energy in an all-equity transaction.
These latest deals build upon Vital Energy's previous successful acquisitions. In May, the company joined with Northern Oil and Gas to acquire Forge Energy II Delaware.