SM Energy to acquire oil & gas assets of XCL Resources for $2.55B

SM Energy announces that it has entered into an agreement to acquire the Uinta Basin oil and gas assets owned by certain entities affiliated with XCL Resources , a private company backed by EnCap Investments and Rice Investment Group for an unadjusted purchase price of $2.55B. Concurrently, Northern Oil and Gas, Inc. ( NOG) will acquire an undivided twenty percent (20%) of the oil and gas assets of XCL for $510 million, resulting in a $2.04 billion purchase price net to the Company for an undivided 80% interest of the assets . SM Energy intends to serve as the operator of the assets currently operated by XCL. The Company plans to finance the acquisition through a combination of debt and cash on hand…This value-driven acquisition meets SM Energy’s strategic objectives: Expected to be immediately accretive to key metrics: Acquired for 2.9x NTM Adjusted EBITDAX( the acquisition is expected to be immediately accretive to key financial metrics. Based on 2025E projections, 2025E Adjusted EBITDAX is expected to increase ~35%, 2025E Adjusted free cash flow is expected to increase ~45%, and 2025E cash production margin(6) is expected to increase ~11%.