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NOG Successfully Acquires Utica Shale and Delaware Basin Operations
02/20/2024
Northern Oil and Gas (NOG) has successfully completed two acquisitions, investing $162.6 million in properties within the Utica Shale and the northern Delaware Basin.
In November 2023, NOG ventured into the Utica Shale by acquiring interests from a private seller, including less than one producing well and slightly over one well in development, spanning several counties in Ohio. These areas, primarily operated by Ascent Resources, focus on extracting oil and gas from the Point Pleasant Formation and the Utica Shale, with the Ohio assets being a significant part of this strategy.
Additionally, NOG expanded its presence in the Delaware Basin through another deal, adding interests in about 3,000 acres in New Mexico's Lea and Eddy counties. This addition complements NOG's existing stakes in the area, covering 90% of the leasehold.
Originally pegged at $174 million, the final investment was adjusted to $162.6 million, including closing costs and adjustments, paid over the end of 2023 and the start of 2024. The payment included a significant deposit made at the agreement signing, with the balance settled in early 2024, subject to final adjustments.
For the second quarter of 2023, NOG reported record quarterly production, highlighting a substantial year-over-year increase in both oil and natural gas production. This growth was part of their updated guidance, which forecasted an annual production range of 96,000 to 100,000 barrels of oil equivalent per day (Boe/d) and set a total budgeted capital expenditure between $764 million to $800 million.
About NOG
NOG stands out as a leading investor in non-operated energy assets across America, focusing on strategic acquisitions in the country's top hydrocarbon-producing regions. The company continues to focus on low-risk, high-return portfolio diversified by geography and commodity, primarily targeting premier regions of the United States such as the Permian, Williston, and Marcellus basins.
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Occidental to Streamline Operations with $20 Billion Western Midstream Sale?
Occidental Petroleum is looking into selling Western Midstream Partners. OXY focuses on natural gas pipelines in the U.S. and is worth around $20 billion, including its debt. This sale could help the company cut down its large debt of $18.5 billion, which grew due to buying other companies. Recently, Occidental agreed to buy CrownRock for $12 billion, adding more debt to its books. This comes after its huge $54 billion purchase of Anadarko Petroleum four years ago. The news about possibly selling Western Midstream made its shares go up by 5.7% to $30.81, reaching their highest value since July 2019. However, Occidental's shares fell by 1.6% to $59.56, as part of a wider drop among energy companies.
TOP 2022 vs 2023 Permian Producers Overview by Rextag
The Permian Basin, America's prime oil region, faced significant challenges during the COVID-19 pandemic. The industry saw a drastic reduction in rigs and fracking crews and had to close some operations as oil prices plummeted, leading to widespread restructuring. Now, the Permian is making a strong comeback. Over the last three years, exploration and production companies (E&Ps) have increased their drilling activities. They're focusing on spending wisely and maximizing returns to their investors. The Permian's role is crucial. It was projected to contribute over 5.98 million barrels of oil per day in December, making up about 62% of the total oil production in the Lower 48 states, as per the EIA.
OXY has been the leader in Permian Basin production for the past five years. Currently, the Houston-based oil and gas company is deepening its presence in the basin with a $12 billion acquisition of CrownRock, adding over 94,000 acres in the Midland Basin and increasing its oil output by about 170,000 barrels per day. Occidental announced an increase in its proved reserves to 4.0 billion barrels of oil equivalent by the end of December 2023, up from 3.8 billion the previous year. Activities in the Permian largely fueled this rise. Occidental added approximately 303 million barrels through infill development projects as well as new discoveries and the further development of existing fields brought in another 153 million barrels.
TotalEnergies kicked off 2024 with a net income of $5.7 billion in the first quarter, marking a modest 3% increase from the same period last year and a 13% rise from the previous quarter. This growth occurred despite experiencing drops in both the volume and price of gas sales over the year and the quarter. Their adjusted net earnings, which exclude one-time or unusual items, were $5.1 billion. This represents a significant 22% decline compared to last year and a slight 2% drop from the last quarter. The company's earnings before tax, depreciation, and amortization reached $11.5 billion, while their cash flow from operations significantly decreased to $2.2 billion, falling by 58% from last year and a steep 87% from the previous quarter. TotalEnergies also recorded $644 million in impairments.
New Mexico leads the Rockies region in gas production and ranks as the sixth-largest in terms of active gas wells in the U.S. Last year, the state's gas well count slightly increased by 0.2% to 30,699, with new additions in both the northwestern San Juan Basin and the southeastern Permian Basin. Meanwhile, just to the north in Colorado, gas producers grew by a modest 0.1% to 30,322, primarily due to increased drilling activity in the DJ and Piceance basins. Wyoming saw a decline in its active gas wells by 3.7%, down to 17,006, with production mainly in Sublette, Sweetwater, and Converse counties reflecting stable or slightly reduced drilling activity. Utah also experienced a slight decrease of 0.2% in its number of gas wells, totaling 6,463. In Q1 2024, oil and gas industry activity in Oklahoma, Colorado, and northern New Mexico experienced a decline. This marks the fifth consecutive quarter of contraction in drilling and business activities within these regions. According to a survey that included responses from 33 firms operating in the Rockies, this downtrend is expected to continue over the next six months.