The Woodlands-based Earthstone Energy said Monday it has agreed to acquire assets in Midland Basin of privately held Bighorn Permian Resources in a cash and stock deal valued at $860 million ($770 million cash). Earthstone will acquire about 110,600 net acres (98 percent operated) primarily in Reagan and Irion counties. Average production was 42,400 boed (25 percent oil) in November 2021. The deal increases Earthstone’s footprint with 49 gross (35 net) drilling locations. Bighorn previously was known as Sable Permian Resources.
Annual production is expected to be flat or moderate growth based on continuously running 4 rigs by Earthstone in Midland Basin and Chisholm in Delaware Basin (acquired in December). Capital expense budget in 2022 is $410 million to $440 million with production of 76,000 to 80,000 boed (with the two acquisitions).
Robert J. Anderson, president and CEO, said, “The proximity of the Bighorn assets to existing Earthstone operations positions us to create further value by applying our proven operating approach to these assets primarily in the form of reducing costs… We are excited about the future of Earthstone.”