Halcón Resources will acquire producing and undeveloped oil and gas assets in the Williston Basin from Petro-Hunt for a total consideration of $1.45bn.
The purchase price will include $700m in cash and $750m in equity for the 81,000 net acres prospective for the Bakken and Three Forks formations primarily located in Williams, Mountrail, McKenzie and Dunn Counties, North Dakota.
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There are five operated drilling rigs running on the properties, which have an average net production in excess of 10,500 barrels of oil equivalent per day, and total proved reserves are approximately 42.4 million barrels of oil equivalent. An internally estimated resource potential is greater than 100 million barrels of oil equivalent.
Halcón Resources has over 135,000 net acres in the Williston Basin and the company-wide average net production is approximately 26,500 barrels of oil equivalent per day.
Halcón Resources chairman and chief executive officer, Floyd C Wilson, said the acquisition is in line with the company strategy of building an oil company with a multi-year drilling inventory.
"This transaction improves our leverage profile and will effectively increase our estimated proved reserves on a pro forma basis by over 58% to approximately 115 million barrels of oil equivalent, 79% of which is liquids," said Wilson.
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By GlobalDataPetro-Hunt president, Bruce W Hunt, said the company has become a significant Halcón shareholder through this transaction.
"We will continue to operate production of approximately 24,000 barrels of oil equivalent per day and develop our 600,000 plus acres of oil and gas leasehold in the Williston Basin with the full attention of our existing staff," said Hunt.
Halcón has secured financing commitments from Wells Fargo, J.P. Morgan, Goldman Sachs and Barclays which will provide a $500m bridge loan commitment.
Halcón has also entered into an agreement with Canada Pension Plan Investment Board (CPPIB), which has agreed to purchase $300m of the company’s common stock, at $7.16 per share.
CPPIB vice-president and head of Relationship Investments, R. Scott Lawrence, said, "CPPIB’s investment aligns with our strategy to provide strategic, long-term capital to well-positioned companies like Halcón and work with management to help create value now and in the future."
The transaction is subject to customary closing conditions.
