EOG Resources has agreed to acquire Yates Petroleum for $2.5bn as part of its strategy to expand its presence in the US.
Crude oil and natural gas company Yates has 1.6 million net acres across the western region of the US.
Under the agreement, EOG will acquire production of 29,600 barrels of crude oil equivalent per day, reserves of 44 million barrels of oil equivalent and Delaware Basin position of 186,000 net acres.
The acquisition will also include northwest shelf position of 138,000 net acres, Powder River Basin position of 200,000 net acres and an additional 1.1 million net acres in New Mexico, Wyoming, Colorado, Montana, North Dakota and Utah.
EOG chairman and CEO William Thomas said: "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.
"We are excited by this unique opportunity to advance EOG's strategy of generating high-return growth by developing premium wells at low costs that enhance long-term shareholder value.”
EOG has an average net daily production of 551 thousand barrels of crude oil equivalent.
The acquisition of Yates will immediately add an estimated 1,740 net premium drilling locations in the Delaware Basin and Powder River Basin to EOG's inventory of drilling locations.
The combined company’s total Delaware Basin acreage position will now be approximately 424,000 net acres.
The combination also adds 81,000 net acres from Yates in the core development area of the Powder River Basin.
Subject to customary closing conditions, the acquisition is expected to close next month.
