Oasis Petroleum Inc. (NASDAQ: OAS) has announced that it has entered into a series of definitive agreements to sell its entire Permian Basin position for a total gross potential consideration of $481 million.
The total consideration consists of $406 million at closing and up to three $25 million annual contingent payments in 2023, 2024, and 2025 if the WTI price averages over $60 per barrel in each respective calendar year, the company noted. Oasis Petroleum said the primary transaction is expected to close around June 30 this year, subject to customary closing conditions, and revealed that two smaller transactions had already closed.
The deal includes a Permian position consisting of approximately 24,000 net acres and first quarter production of 7,200 barrels of oil equivalent per day, Oasis Petroleum revealed. The company highlighted that the transaction positions it exclusively in the Williston Basin, where it said it expects to drive significant value creation through its size, scale, and robust inventory life.
“The decision to exit the Permian Basin while building scale in the Williston Basin is fundamentally based on aligning company resources with our core competitive strengths and strategic focus of building a sustainable enterprise which generates significant free cash flow for the benefit of the company and shareholders,” Danny Brown, Oasis Petroleum’s chief executive officer, said in a company statement.
“The successful conclusion of our Permian divestiture process allows us to bring substantial value forward from an asset that was difficult to scale, strengthens our balance sheet from already peer-leading levels, and allows us to focus our attention on driving significant value from our world-class Williston acreage position, where we see great upside opportunity and long-term running room,” he added.
Earlier this month, Oasis Petroleum announced that it had entered into a definitive agreement to buy select Williston Basin assets from Diamondback Energy in a cash transaction valued at approximately $745 million, subject to customary purchase price adjustments. The transaction, which was approved unanimously by the board of the directors of each company, has an effective date of April 1 and is expected to close in July, subject to customary closing conditions.
Oasis Petroleum is an independent exploration and petroleum company headquartered in Houston, Texas. In a statement posted on its website, Oasis Petroleum notes that, in late 2020, the business emerged from financial restructuring with a strong ESG culture and a best-in-class balance sheet, renewed focus on sustainable returns, rigorous capital discipline, and generating positive free cash flow.
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