SM Energy buys XCL Resources' shale assets for $2 bln (updated)

Northern Oil and Gas

27/06/2024 12:21

(Adds details throughout)
       June 27 (Reuters) - SM Energy  SM.N  said on Thursday it
had agreed to buy some assets of shale-focused producer XCL
Resources for about $2 billion from private-equity firm EnCap
Investments, extending its footprint in the Uinta region in
Utah.
    Northern Oil and Gas  NOG.N  will also buy 20% of the oil
and gas assets of XCL for $510 million, resulting in a total
deal value of $2.55 billion.
    XCL, backed by EnCap and Rice Investment Group, is one of
the largest energy producers in the Uinta shale formation of
Utah.  It produces around 55,000 barrels of oil equivalent per
day.
    The deal extends a surge in merger and acquisition activity
in the U.S. shale patch this year after a record 2023. 
    This wave of consolidation, fueled by oil and gas producers
seeking to secure reserves, makes for a favorable environment
for private equity firms such as EnCap to cash out.
    The transaction is expected to close in September, after
which SM Energy will serve as the operator of the assets.
    SM Energy, which operates in the Eagle Ford and Midland
Basins in Texas, plans to finance the acquisition through a
combination of debt and cash on hand.    

 (Reporting by Seher Dareen in Bengaluru; Editing by Sriraj
Kalluvila)
 ((Seher.Dareen@thomsonreuters.com; If in India call +91 74832
70128;))