US-based independent energy company Vital Energy has signed a $540m deal to buy Forge Energy II Delaware’s assets.

The agreement is expected to further expand Vital Energy’s focus on the Permian basin focus and establish a core operating position in the Delaware Basin.

It was signed in partnership with an unnamed third party.

Vital Energy will buy 70% of the assets for $378m and will retain operating control of the asset. The third-party will be acquiring the remaining 30% for $162m.

The deal will increase Vital Energy’s leasehold in the Permian basin to about 198,000 acres by adding nearly 42,000 gross acres and establish core positions in Pecos, Reeves, and Ward counties, the company said.

Vital Energy President and CEO Jason Pigott said: “This accretive acquisition is attractively priced and significantly expands Vital Energy’s Permian focus, adding a core operating area in the Delaware Basin.

“We have a proven track record of building value through our disciplined acquisition strategy. Today’s deal significantly enhances our outlook for free cash flow generation which we will use to pay down debt and strengthen our balance sheet.”

Forge Energy II Delaware is a portfolio company of EnCap.

Earlier this month, oil and natural gas company Callon signed a deal to buy Percussion Petroleum Operating II’s assets in the Permian basin for $475m.