EOG Resources to buy privately held Yates Petroleum for $2.5 bn
07 September 2016
US petroleum and natural gas exploration company EOG Resources Inc yesterday struck a deal to buy privately held Yates Petroleum Corp for $2.5 billion in stock and cash, in order to strengthen its position in the Permian Basin oil fields.
Under the terms of this private, negotiated transaction, EOG will issue 26.06 million shares of common stock valued at$2.3 billion and pay $37 million in cash.
EOG will assume and repay at closing $245 million of Yates debt offset by $131 million of anticipated cash from Yates.
Yates is an independent crude oil and natural gas company with 1.6 million net acres across the western US.
Its acreages has production of 29,600 barrels of crude oil equivalent per day, net, with 48 per cent crude oil, proved developed reserves of 44 million barrels of oil equivalent, net Delaware Basin position of 186,000 net acres, Northwest Shelf position of 138,000 net acres, Powder River Basin position of 200,000 net acres.
It also has an additional 1.1 million net acres in New Mexico, Colorado, Montana, North Dakota, Wyoming, and Utah.
Yates has 186,000 net acres of stacked pay in the Delaware Basin in New Mexico that is highly prospective for the Wolfcamp, Bone Spring and Leonard Shale formations. This brings the combined company's total Delaware Basin acreage position to approximately 424,000 net acres, a 78 per cent increase to EOG's existing holdings.
Additionally, Yates has 138,000 net acres on the Northwest Shelf in New Mexico that is prospective for the Yeso, Abo, Wolfcamp and Cisco formations. These shallow plays have the potential to contribute additional amounts of premium inventory of EOG.
"This transaction combines the companies' existing large, premier, stacked-pay acreage positions in the heart of the Delaware and Powder River basins, paving the way for years of high-return drilling and production growth," said William "Bill" Thomas, chairman and CEOr of EOG.
EOG Resources is one of the largest independent crude oil and natural gas companies in the US with proved reserves in the US, Trinidad, the UK and China.
The New York Stock Exchange-listed company has total estimated net proved reserves of 2,118 million barrels of oil equivalent (MMBoe), comprising of 52 per cent crude oil and condensate, 18 per cent natural gas liquids and 30 per cent natural gas.
Approximately 97 per cent of these reserves are located in the US and its total worldwide production in 2015 was 209 MMBoe.