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QEP to offload Williston basin assets to Vantage
Posted on Thursday, 08 November 2018 10:16
QEP Energy, a wholly-owned subsidiary of QEP Resources, has reached an agreement to sell its operations in the Williston basin to Vantage Acquisition Operating Company, controlled by Vantage Energy Acquisition, for about USD 1.73 billion.
The value includes USD 1.65 billion in cash, as well as contractual rights to receive up USD 50.00 million and USD 25.00 million in common stock, only if the daily volume weighted average trading price of the buyer’s shares for between ten and 20 consecutive days is at, or above, USD 12.00 and USD 15.00, respectively.
QEP will receive the equity if the thresholds are met at any time in the next five years following closing.
The transaction comprises all assets in North Dakota and Montana, including the South Antelope and Fort Berthold leasehold in the Williston Basin.
Completion is slated for either the first quarter of 2019, or early in the second-quarter, and is subject to shareholder and regulatory approvals.
QEP Resources is expected to discuss the deal at a conference call for its third-quarter 2018 results, due to be held later today.
Commenting on the agreement, chief executive Chuck Stanley, said: “The Williston Basin assets have been a significant contributor to QEP for many years and were critical in our pivot towards a more oil-focused portfolio.
“This transaction marks an important milestone in simplifying our asset portfolio as we continue on our path to becoming a Permian pure-play operator.
“We intend to use the proceeds from asset sales to fund the ongoing development of our core Permian assets, reduce debt, and return cash to shareholders through a share repurchase program.”
Following closing, with the addition of the target, the buyer will expand its oil-weighted production and gain an attractive set of development drilling and refracturing projects.
The QEP assets have more than 100,000 net acres and produce about 46,000 barrels of oil equivalent (boe) per day.
QEP Resources is billed as a leading player in the crude oil and natural gas industry in the US, with total production of 53.10 million boe in 2017, in addition to reserves of 684.70 million boe and record crude oil proved reserves of 320.50 million boe for last year.
Vantage made its stock market debut in April 2017, raising USD 480.00 million in the process, and the acquisition in the Williston basin is its first major purchase since going public, according to Zephyr, the M&A database published by Bureau van Dijk.
© Zephus Ltd