Tulsa-based Vital Energy said Friday it will acquire Permian Basin assets of Forge Energy II Delaware, portfolio company of EnCap, for $540 million cash to expand its Permian focus and establish a core operating position in Delaware Basin. Vital will acquire 70 percent of the assets for $378 million, and an unidentified third party will acquire 30 percent for $162 million. The deal will add about 42,000 gross acres (24,000 net) to Vital’s Permian Basin leasehold and 100 gross high-value oil locations with average breakeven price of $50 per barrel for WTI crude. “This accretive acquisition is attractively priced and significantly expands Vital’s Permian focus, adding a core operating area in Delaware Basin,” Jason Pigott, CEO, said. Closing is expected in Q2.
Current net production on the acquired acreage is about 9,500 boed (65 percent oil). The deal expands Vital’s Permian leasehold to about 198,000 net acres and establishes core operating positions in Pecos, Reeves and Ward counties. Vital expects to operate one rig on the acquired properties – down from two operated by Forge – to keep production flat.