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SM Energy (NYSE:SM) said Thursday it agreed to acquire oil and gas assets in Utah’s Uinta Basinfrom XCL Resources, a private company backed by EnCap Investments and Rice Investment Group, for $2.55B in cash, confirming earlier speculation.
Northern Oil and Gas (NOG) will acquire 20% of the XCL oil and gas assets for $510M in cash, resulting in a $2.04B purchase price net to SM Energy (SM) for an undivided 80% interest of the assets.
SM Energy (SM) said the assets it is acquiring include 37.2K net acres (~99% operated), increasing the company’s core net acreage by 14%, with 43K boe/day of production, increasing the company’s estimated 2025 net output to 195K boe/day and oil mix to greater than 50%.
The Uinta Basin has stacked pay potential and high oil content that combine to result in top-tier well performance and inventory with upside, SM Energy (SM) said, adding that its track record in full stack co-development offers the potential to drive differential value across as many as 17 benches.
SM Energy (SM) also said its board approved an increase in the company’s fixed quarterly dividend to $0.20/share, expected to begin in Q4 2024, and authorized a new $500M share repurchase program through 2027, replacing the remaining existing program.