Northern Oil & Gas to Acquire Veritas Energy Affiliates' Non-Operated Permian Assets

Northern Oil & Gas Inc. agreed to acquire all the non-operated oil and gas assets that are owned by Veritas Energy LLC affiliates in the Delaware and Midland Basins for $406.5 million in cash.

Northern will also issue the Veritas Energy affiliates roughly 1.9 million seven-year equity warrants with a $28.30 strike price at the deal's closing.

Northern plans to finance a portion of the transaction through the launch of a public equity offering.

The assets are expected to generate about $43 million to $45 million of cash flow from operations in the fourth quarter of this year and $50 million of capital expenditures and expected closing adjustments, the company said.

Northern expects capital expenditures around $35 million to $40 million on the assets next year.

The assets are mostly located in Lea and Eddy counties in New Mexico and Loving, Reeves, Ward and Winkler counties in Texas.

The transaction is expected to close in the first quarter.

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