NOG announces accretive Uinta Basin joint acquisition with SM Energy

Northern Oil and Gas ( NOG) announced that it has entered into a definitive agreement to acquire a 20% undivided stake in the XCL Assets in partnership with SM Energy (SM) for a purchase price, net to NOG, of $510.0 million in cash, subject to customary closing adjustments. The Acquired Assets are located primarily in Uintah and Duchesne Counties, Utah and include approximately 9,300 net acres and 97.6 underwritten net undeveloped locations, normalized for 10,000 foot laterals. Significant additional upside locations remain in the Deep and Upper Cube. The prospective development plan is based on conservative and widened spacing from the current operator. The Company sees substantial return upside from increased lateral lengths (extending to 3-miles) and cost savings from an integrated co-owned sand mine facility scheduled to come online within twelve months. Upon closing and transition of services, the operator of substantially all of the assets will be SM, with NOG participating in development pursuant to cooperation and joint development agreements entered into in connection with the acquisition. “The Uinta Basin has emerged as one of the best and fastest growing oil resources in the United States, and SM has a track record as one of our best and most responsible operators. We look forward to working with them for many years to come. We believe this transaction will be the most accretive in our history, benefiting per share net profit and free cash flow both immediately and over time.” “With XCL, we are acquiring a multi-stacked pay acreage position with significant long-term upside,” commented Adam Dirlam, NOG’s President. “These assets are exemplary of our returns-focused strategy: delivering immediately while offering significant exploration potential further enhancing NOG’s optionality. Much like our prior joint development transactions, we have devised an aligned, conservative development and governance plan with a proven E&P company. We continue to be the partner of choice for our operators as the largest, best capitalized and most reliable working interest owner in the United States.”