SRC Energy Inc (NYSEAMERICAN:SRCI) reported that it has finalized a Purchase and Sale deal to buy certain non-operated production and undeveloped land from Noble Energy for $568 million in cash, subject to usual purchase price adjustments.
SRC Energy reported that the acquisition of non-operated production and undeveloped lands is anticipated to close in December 2017. The Noble Agreement envisages a second closing for operated properties, the worth of which is designated as $40 million. However, the price compensated will be decided depending on the production of the wells taken at that future date.
The completions are subject to the closure of customary due diligence and necessary conditions. SRC Energy plans to finance the purchase price of the deal with proceeds from current liquidity and financing transactions. The acreage to be bought exhibits a 50% jump in the firm’s leasehold and a 55% jump in drillable locations.
Combined with company’s current acreage, this led in a consolidated core position of around 90,000 net acres. This contiguous footprint results in further prospects to drive operational efficiencies with gross well locations of over 1,700 identified that have, mainly, long- and mid-lateral design.
Lynn A. Peterson, the CEO and Chairman of SRC Energy, expressed that this deal strengthens company’s position as a major DJ Basin operator with a major inventory of efficient, high return advancement opportunities together with a conservative balance sheet. The operating efficiencies that they have gained in the previous few quarters will transfer effortlessly to this new acreage.
The CEO of SRC Energy added that they will start working on their expanded position straightaway with planning, permitting and infrastructure buildout. As considerably all of the acreage is occupied by production, they will take a planned approach before putting additional capital.
In the last trading session, the stock price of SRC Energy declined more than 4% to close the day at $8.63.