Crescent Energy has agreed to buy oil and gas producing assets in the Uinta basin of Utah, in the US, from Verdun Oil Company, in a deal worth $815m.
The deal includes over 400 vertical and horizontal producing wells, and more than 145,000 contiguous net acres, primarily located in Duchesne and Uinta, which were previously owned by EP Energy.
The acquisition forms part of Crescent’s strategy to purchase high-value and accretive cash-flowing assets while also maintaining financial strength.
Planned to be completed in the first half of 2022, the all-cash transaction is subject to customary closing conditions, including certain regulatory approvals.
Crescent CEO David Rockecharlie said: “We are acquiring these assets at a compelling valuation. They are a great addition to our existing Rockies footprint, and align perfectly with our cash flow based strategy.
“Importantly, this transaction maintains our commitment to financial strength and flexibility while adding meaningful scale to our low-decline production base, free cash flow, and proven inventory of highly economic re-investment opportunity.”
Upon the completion of the transaction, Crescent intends to operate two rigs in the Uinta basin this year.
Crescent will also revise its 2022 capital budget, which is expected to be between $600 and $700m.
In 2021, private equity firm EnCap Investments, which owns the Verdun Oil Company, agreed to buy EP Energy’s assets in the Eagle Ford and Uinta basins for $1.5bn.
US antitrust regulators threatened to block the deal between EnCap and EP Energy, citing concerns that EnCap would become ‘too dominant’ in the Uinta basin, reported Reuters.
In order to avert possible legal challenge from the regulator, EP Energy relaunched the sale of its oil-producing assets in Utah, the news agency reported, citing people familiar with the matter.
Earlier this month, Crescent announced that it was considering the sale of some of its assets in Alberta and Saskatchewan, in Canada.