The Woodlands-based Earthstone Energy said Thursday it agreed to acquire Novo Oil & Gas Holdings, privately held E&P company focused in Delaware Basin and backed by EnCap Investments, for $1.5 billion. And Northern Oil and Gas said it will acquire one-third working interest in Novo oil and gas assets from Earthstone for $500 million. Earthstone added 11,300 net acres (99 percent operated) in core of Delaware Basin in Eddy County, N.M., and Culberson County. Its production will increase by 38,000 boed (37 percent oil) from 114 wells to bring total production to 135,000 boed.
Robert J. Anderson, president and CEO of Earthstone, said, “The addition of approximately 200 high-quality, low-breakeven locations deepens our drilling inventory and with our flat rig count extends our inventory life significantly to over a decade. We believe the benefits of continued consolidation are very compelling… We are also pleased that Northern recognized the value of these assets and chose to participate.”
Earthstone intends to maintain its five operated drilling rigs after closing in 2023Q3.