Whiting Petroleum Corporation (NYSE: WLL) (“Whiting” or the “Company”) today announced that it has entered into separate definitive agreements to acquire oil and gas assets in the Williston Basin of North Dakota and divest of all its oil and gas assets in the Denver-Julesburg Basin of Colorado (the “Redtail assets”).
Williston Basin, North Dakota
The Williston Basin assets are being acquired from a private company for total cash consideration of $271 million, before typical closing adjustments. The assets include 8,752 net acres with net daily production of approximately 4,200 barrels of oil equivalent per day (BOE/d) (80% oil); 5 gross/ 2.3 net drilled and uncompleted wells; and 61 gross / 39.5 net undrilled locations (100% operated) located in Mountrail County, North Dakota. These properties adjoin and complement Whiting’s existing operations in the Sanish field and will require minimal additional general and administrative costs. These top-tier locations immediately compete for capital within the Company’s existing portfolio and will allow Whiting to increase capital efficiency by extending laterals on certain wells when combined with its existing acreage.
Denver-Julesburg Basin, Colorado
Whiting also entered into an agreement to divest its Redtail assets, including associated midstream assets, located in Weld County, Colorado to a private entity for total cash consideration of $187 million, before typical closing adjustments. The assets span 67,278 net acres with daily production of approximately 7,100 BOE/d (51% oil).
Both transactions are expected to close in the third quarter of 2021 with the difference in acquisition costs and divestiture proceeds funded with existing availability on the Company’s revolver.
Management Comment
Lynn A. Peterson, President and CEO of Whiting, commented, “These two transactions result in a significantly deeper drilling inventory in our key Sanish operating area, while divesting of properties in Colorado that were not going to compete internally for capital. These transactions demonstrate our strategy to focus our attention on value-enhancing opportunities that compete for capital in a $50 oil environment. Including these transactions, the Company now estimates that in a mid-$50s oil environment it has over 6 years of high-quality drilling inventory, assuming a two rig drilling program.”