Vital Energy, a prominent oil and natural gas company based in Tulsa, Okla., revealed its plans to acquire valuable assets in the Permian Basin through a series of three separate transactions. These transactions, with a combined value of approximately $1.17 billion, are projected to significantly augment annual production by over 25% and increase the company’s 2024 free cash flow by approximately 90%. These calculations are based on an assumed oil price of $80 per barrel.
To fund these acquisitions, Vital Energy has decided to issue over 8 million shares of common stock and increase its borrowing under its credit facility. This strategic move positions the company to execute the acquisitions successfully while maintaining financial stability.
The first two transactions involve the acquisition of Delaware Basin assets from Henry Energy and Maple Energy Holdings. These deals will be structured as all-stock transactions. Additionally, Vital Energy will pay $285 million in cash and issue 1.58 million common shares to Tall City Property Holdings for their valuable assets.
The anticipated timeline for closing these transactions is set for the fourth quarter of 2023. Vital Energy aims to complete the deals efficiently and seamlessly, ensuring a smooth transition to capitalize on the immense potential of the assets.
In conclusion, Vital Energy’s strategic acquisitions in the Permian Basin demonstrate the company’s commitment to robust growth and maximizing shareholder value. These transactions effectively position the company for significant increases in annual production and free cash flow, reinforcing its leading presence in the oil and natural gas industry.