Oasis Petroleum has entered into a series of definitive agreements to sell its entire Permian Basin position for total gross potential consideration of $481m.
The total consideration consists of $406m at closing and up to three $25m annual contingent payments in 2023, 2024 and 2025 if West Texas Intermediate (WTI) averages over $60 per barrel in each respective calendar year. The non-strategic Permian position consists of approximately 24,000 net acres and 1Q21 production of 7.2 million barrels of oil equivalent per day (mboe/d)
In the beginning of May, Oasis bought select Williston Basin assets from Diamondback Energy in a cash transaction valued at approximately $745m. Assets include approximately 27 mboe/d of production in 1Q21 on a two-stream basis and 95,000 net acres.
The Permian Basin sale positions Oasis exclusively in the Williston Basin, where the company expects to drive significant value creation through its size, scale and robust inventory life as one of the basin’s largest operators.
“The decision to exit the Permian Basin while building scale in the Williston Basin is fundamentally based on aligning company resources with our core competitive strengths and strategic focus of building a sustainable enterprise which generates significant free cash flow for the benefit of the company and shareholders,” said Oasis CEO Danny Brown.
“The successful conclusion of our Permian divestiture process allows us to bring substantial value forward from an asset that was difficult to scale, strengthens our balance sheet from already peer-leading levels, and allows us to focus our attention on driving significant value from our world-class Williston acreage position, where we see great upside opportunity and long-term running room,” he continued.
The combined Williston and Permian transactions position Oasis to take advantage of expanded scale and result in very low leverage. “We believe Oasis represents a compelling investment opportunity, and we will continue to be aggressive in pursuing strategies to unlock value,” said Brown.
The primary transaction is expected to close around June 30, 2021, subject to customary closing conditions, and two smaller transactions have already closed. Oasis has updated its 2021 outlook to reflect the divestment.
For more information visit: www.oasispetroleum.com
