Banking Recap

NORTHERN OIL & GAS, INC. Announces Acquisition for $406.5M

Northern Oil and Gas, Inc., a NYSE American-listed non-operated oil and gas investment company, agreed to acquire substantially all of the non-operated Permian Basin assets owned by entities affiliated with Veritas Energy, LLC, in a transaction described by Northern as a significant Permian Basin expansion.

Nov 15, 2021·SEC EDGAR (8-K)·pending regulatory·non-operated asset acquisition

Deal value

The deal is sourced from Northern's own 8-K press release exhibit, filed November 15, 2021 (indexed November 16, 2021), detailing the acquisition terms and expected production and valuation metrics.

Tudor, Pickering, Holt & Co., Perella Weinberg Partners' energy-focused affiliate, served as financial advisor to Veritas, the selling counterparty, per the release: "Tudor, Pickering, Holt & Co. is financial advisor to Veritas." On the acquirer side, Morgan Stanley & Co. LLC served as Northern's lead financial advisor, with Bank of America serving as a co-advisor to Northern.

Kirkland & Ellis LLP served as legal advisor to Northern, and Willkie Farr & Gallagher LLP served as legal advisor to Veritas.

The purchase price was $406.5 million in cash plus approximately 1.9 million common equity warrants with an exercise price of $28.30 per share. The acquired assets had current production of approximately 11,500 Boe per day (3-stream basis) and an estimated PV-10 on proved developed producing (PDP) and work-in-progress/authorization-for-expenditure (WIPs/AFEs) assets of approximately $429 million, per the release. Forward one-year unhedged cash flow from operations was expected to be approximately $185 million at then-current strip pricing.

Not disclosed in the reviewed excerpt: the expected closing date of the transaction, the total value attributable to the warrant component at issuance, and whether the transaction was subject to any regulatory approval or financing contingency.