SM Energy and Northern Oil acquire Uinta Basin assets for $2.5 billion, boosting production and inventory life.

SM Energy and Northern Oil and Gas (NOG) have agreed to jointly acquire oil and gas assets in Uinta Basin in Utah, US for $2.5bn. The assets are owned by XCL Resources, a privately held firm backed by EnCap Investments and Rice Investment Group. SM Energy plans to acquire an undivided 20% of the assets for $510m, while NOG will acquire the remaining 80%. SM Energy intends to become the operator of these assets, taking over the remaining 20% and increasing per share net profit and free cash flow immediately. The acquisition is expected to increase SM Energy’s production to approximately 195 thousand barrels of oil equivalent per day, with crude oil expected to be over 50% of its production mix by 2025. The transaction includes around 390 net drilling locations, extending SM Energy’s inventory life by over two years to over 12 years.