Vital Energy, an independent energy firm, recently expanded its holdings in the Permian Basin by purchasing additional working interests in prime production assets for approximately $55 million.
These newly acquired assets were originally part of a larger transaction involving Henry Energy, Moriah Henry Partners, and Henry Resources.
“Our larger operating footprint across the Midland and Delaware basins continues to drive new efficiencies through bolt-on transactions that increase working interest or optimise 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.”
- Vital Energy president and CEO Jason Pigott
Details of Transaction
- The company has announced that this acquisition will notably increase its working interest across 45 wells, with an average rise of 24%.
- This expansion is expected to significantly enhance Vital Energy's projected output for 2024, potentially adding around 1,400 barrels of oil equivalent per day (57% oil) and boosting its 2024 Free Cash Flow by an estimated $20 million.
- To fund this acquisition, Vital Energy issued 627,000 shares of common stock and 595,000 shares of its 2.0% cumulative mandatorily convertible preferred securities.
Jason Pigott, President and CEO of Vital Energy, commented on the acquisition, noting its alignment with the company's growth strategy in the Permian Basin. The deal underscores the advantages of Vital Energy's increased operational scale in the region.
In September 2023, Vital Energy executed three definitive agreements, totaling roughly $1.165 billion, to enlarge its operations in the Permian Basin. These agreements included transactions with Henry Energy and Henry Resources.
The company leveraged tag-along rights associated with certain assets, which allowed them to acquire and finance these assets under the same conditions as those in the Henry purchase and sale agreement.
About Vital Energy
Headquartered in Tulsa, Oklahoma, Vital Energy, Inc. stands as an independent player in the energy sector. The company's strategic direction centers on acquiring, exploring, and developing oil and natural gas properties, primarily in the Permian Basin located in West Texas.
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