The Woodlands-based Earthstone Energy told Enverus that its assets acquired recently from Delaware Basin operator Novo Oil & Gas will immediately compete for capital in Earthstone’s portfolio. Earthstone and Northern Oil & Gas said June 15 they are acquiring Novo for $1.5 billion. After closing in 2023Q3, Earthstone said it will move one of its Midland Basin rigs to the Novo acreage – leaving it with one rig in Midland Basin and four in Delaware Basin.
Novo’s acreage in Eddy County, N.M., and Culberson County provides 200 locations primarily in Wolfcamp and Bone Spring with breakevens averaging less than $40 per barrel of crude. Novo’s assets had recent production of 38,000 boed (33 percent oil) from 114 wells. Novo had three rigs for the first nine months of 2022 and dropped to two rigs in 2022Q4 and 2023Q1. It brought online more than 40 wells in 2022.
Earthstone is increasing its 2023 production guidance by 33 percent at midpoint to 130,000-to-135,000 boed (41 percent oil) but not increasing its capex of $725 million to $775 million.