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NOG Grows Its Acreage Position in Delaware
01/10/2023![NOG-Grows-Its-Acreage-Position-in-Delaware](https://images2.rextag.com/public/blog/113Blog_NOG_Closes_Northern_Delaware_Basin Acquisition_12_2022 (1).png)
According to the company’s press release on December 19, Northern Oil and Gas Inc. (NOG) closed its announced deal with a private seller of non-operated interests in the Northern Delaware Basin for $131.6 million in cash.
The acquisition was announced with a $13 million deposit in October and is the third Permian Basin acquisition since August, adding to NOG’s $400 million of Permian Basin acquisitions in 2022.
The assets of 2,100 net acres are primarily operated by a private company Mewbourne Oil Co., with production anticipated to total almost 2,500 boe/d in 2023. Also, Coterra Energy Inc. and Permian Resource Corp. are operators of the assets. The assets contain high-quality, low breakeven development that is leveraged to some of NOG’s top operating partners, as our investors have come to expect.
With an effective date of November 1, 2022, the purchase is expected to add roughly $55 million of unhedged cash flow in 2023 as of October 10.
NOG, based in Minnetonka, Minn., targets to be the go-to resource for operators that want to offload non-operated working interests in leasehold. Initially, concentrated in the Williston Basin, the company has also extended into the Marcellus Shale and Permian Basin through a series of purchases.
NOG has incredibly expanded its position in the Permian Basin in 2022. The company’s dealmaking this year soared in January with the closing of a $406.5 million acquisition of Veritas Energy’s non-op position in the Permian, which marked the company’s largest investment to date.
Since then, NOG has increased almost $400 million worth of additional acquisitions in the Permian. Transactions have included a bolt-on acquisition of core northern Delaware Basin properties announced in late September for an initial purchase price of $157.5 million and the closing of a $110 million deal for Midland Basin properties from Laredo Petroleum Inc. on October 6.
One more northern Delaware Basin bolt-on acquisition unveiled by NOG on October 11 includes core non-operated working interest properties in New Mexico’s Lea and Eddy counties and Loving and Winkler counties in West Texas. The purchased assets cover approximately 2,100 net acres, 5.3 net producing wells, 2.1 net wells-in-process, and about 17.2 net undeveloped locations.
Production of almost 2,500 boe/d (68% oil, 2-stream) is anticipated from the acquired assets for 2023, making an estimated $55 million of unhedged cash flow in 2023 at strip pricing as of October 10 and resulting in a 2.4x transaction multiple.
Wells Fargo Securities is the financial adviser to NOG for the acquisition. Kirkland & Ellis LLP is serving as the company’s legal adviser. TPH & Co., the energy business of Perella Weinberg Partners, served as a financial adviser to the seller, and Bracewell LLP is serving as the seller’s legal adviser.
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CA$375 Million Bolt-on Deal to Expand Crescent Point
![$data['article']['post_image_alt']](https://images2.rextag.com/public/blog/109Blog_Crescent_Buys_Acreage_from_Paramount_12_2022.png)
On December 9, Crescent Point Energy Corp. announced a purchase and sale agreement to develop its core Kaybob Duvernay assets, which will bolt on production, the midstream infrastructure and technical data. With the deal, the company has committed more than US $1 billion to the play. Crescent Point, the Alberta-based company, is purchasing almost 65,000 net acres from Paramount Resources Ltd. for CA $375 (US $274 million) cash. The assets estimate more than 4,000 boe/d, 50% liquids, and include a gas plant, associated pipelines, water infrastructure, and seismic data. The acquired asset’s production consists of 35% condensate, 15% NGL, and 50% shale gas.
Tokyo Gas Is Set to Buy Rockcliff Energy: One of the Top Haynesville's Producers
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On January 3, U.S. natural gas producer Rockcliff Energy from private equity firm Quantum Energy Partners was set to be sold to a unit of Tokyo Gas Co. Ltd. for roughly $4.6 billion, including debt. The all-cash agreement with Houston-based TG Natural Resources, which is 70% possessed by the Japanese energy firm, is decided to be claimed this month, according to anonymous resources, as the discussions were requested to be confidential. Castleton Commodities International (CCI) owns the rest of TG Natural Resources.
![$data['article']['post_image_alt']](https://images2.rextag.com/public/blog/297_Blog_Keystone XL Pipeline Controversy and Wildlife Disaster From Trump's Green Light to Biden's Red Light on the 15 Billion Project.jpg)
The pipeline industry in the USA faced and still faces a range of regulatory challenges, including permitting delays, environmental requirements, and public opposition to pipeline projects. In recent years, pipeline projects like the Keystone XL and Dakota Access pipelines had legal and regulatory obstacles that delayed or canceled their construction. Keystone XL Pipeline, proposed by TransCanada in 2008, aimed to transport crude oil from Canada (around Calgary and Edmonton) to refineries on the Gulf Coast (Port Arthur). The project faced opposition from environmental groups and indigenous communities, who argued that it would contribute to climate change and pose a risk to water resources. In 2015, President Obama rejected the project, citing concerns about its environmental impact. However, in 2017, President Trump revived the project, leading to further legal challenges. In June 2021, U.S. President Joe Biden officially canceled the project on his first day in office.
![$data['article']['post_image_alt']](https://images2.rextag.com/public/blog/282_Blog_Renewable Natural Gas How RNG Changes the Industry.jpg)
The renewable natural gas (RNG) industry in the United States is showing promising signs of growth. As of 2019, the U.S. consumed 261 billion cubic feet (BCF) of RNG, primarily utilized by independent power producers, electric utilities, and various commercial and industrial entities. However, this figure represents only a small fraction of its potential. Research indicates that the U.S. could theoretically produce up to 2,200 BCF of RNG through anaerobic digestion alone, which would equate to about 11% of daily national natural gas consumption.
![$data['article']['post_image_alt']](https://images2.rextag.com/public/blog/295_Blog_Renewable Efforts Lag as Global Oil and Gas Demand Continues to Rise.jpg)
Recently, the progress toward an energy transition is hitting a snag. Sales of electric vehicles are decelerating, and the growth in wind and solar power needs to be keeping pace with expectations. To make matters more challenging, electricity prices are climbing when they were expected to fall. Amidst these setbacks, the oil and gas sectors are proving resilient. According to BP's latest energy outlook, not only are these energy mainstays here to stay, but their demand is expected to remain relatively high even after reaching a peak. Interestingly, BP forecasts that oil demand will reach its zenith next year, marking a critical moment in energy consumption trends. This isn't the first time BP has projected a peak in oil demand. Back in 2019, their review anticipated a decline in demand growth, but the prediction fell flat. Instead, oil demand surged to unprecedented levels following the end of the global pandemic lockdowns, defying previous forecasts and underscoring the enduring dominance of traditional energy sources in the global market.