This story was updated Oct. 19 with the correct location of the acquired acreage, which is in Williams and McKenzie counties, ND; not Divide County as originally written.
Oasis Petroleum Inc., Houston, has agreed to acquire 55,000 net acres and 226 gross operated drilling locations in Williams and McKenzie counties, ND, part of the Williston basin, from Denver-based SM Energy Co. for $785 million.
Internal estimates from Oasis indicate the properties as of Dec. 1 had 50.2 million boe of proved reserves, 63% of which is considered proved developed producing and 77% of which is oil. The properties, 75% of which Oasis expects to operate based on proved reserves, are slated to produce 12,400 boe/d during the fourth quarter.
“This acquisition is a great opportunity to add acreage and inventory that is a natural fit with our existing core and extended core positions and will increase our gross operated drilling locations in our core acreage by approximately 25%,” explained Thomas B. Nusz, Oasis chairman and chief executive officer.
The deal is effective Oct. 1 and expected to close in early December. SM Energy plans to use the proceeds from the sale to fund the majority of its $1.6-billion acquisition of 35,700 net acres in the Midland basin from QStar LLC, a portfolio company of EnCap Investments LP and a related entity (OGJ Online, Oct. 18, 2016). The deals were announced in tandem on Oct. 18.
Bakken-Three Forks operator Oasis also said its third-quarter production averaged 48,509 boe/d, of which 81% was oil. It has increased its full-year standalone company guidance to 49,300-50,000 boe/d.
“We have reduced our current well costs down to $5.2 million from $5.9 million on our 4 million-lb sand slickwater well completion technique,” commented Nusz. He added that the Oasis’ gas processing plant in Wild basin is now online and operating as planned. “This has allowed us to flow wells in Wild basin into our infrastructure over the last couple weeks, and we expect October 2016 production to average over 50,000 boe/d,” he said.
Contact Matt Zborowski at firstname.lastname@example.org.