Northern Oil and Gas Inc. (NOG) has agreed to acquire stakes in Permian Basin properties spanning about 2,800 acres in New Mexico and Texas from Alpha Energy Partners for $157.5 million.

Permian Basin

NOG reported that Mewbourne Oil Co. is the primary operator of the assets, which span about 2,800 acres in the Permian’s Delaware sub-basin in Lea and Eddy counties, NM, and Loving County, TX. Other operators include ConocoPhillips and EOG Resources Inc.

“These assets are squarely in our core focus area and are poised to deliver substantial growth over the coming years, while delivering significant cash flow to bolster shareholders returns,” said NOG CEO Nick O’Grady.

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The Alpha Energy deal would mark yet another recent Permian acquisition for NOG, which said in August that it would go ahead with a Midland sub-basin buy in Howard County, TX. In late 2021 it disclosed a 6,000-acre Delaware deal with Veritas Energy LLC.

Management said the Northern Delaware bolt-on properties include 9.6 net producing wells, 2.8 net authorizations for expenditure and wells-in-process and about 21.2 net undeveloped locations.Three rigs are actively drilling on the acreage.

Production from the assets is expected to be 3,000-3,500 boe/d (68% oil-weighted) next year and top 4,000 boe/d in 2024 and 2025, said management.

“The Northern Delaware Basin continues to be a key target for our consolidation efforts,” said NOG President Adam Dirlam. “This asset has some of the highest quality, lowest-cost inventory we have acquired, and is leveraged to NOG’s top operator in the Permian.”

Management expects the transaction to close in December.