American Oil and Gas Reporter - September 2024 - 83

conference, NextEra Energy Chief Executive
Officer John Ketchum called offshore
wind " a bad bet. "
" NextEra has been hyper-aggressive
in its push to site solar and wind projects
in rural communities across the country
and Canada, " Bryce describes. " NextEra
is the world's largest producer of alt-energy,
which means Ketchum knows the
industry. Ketchum said of offshore wind,
'We find it hard enough just to take care
of a fleet on shore with some of the
issues that we deal with as a company,
and we are best in class. "
Bryce then cites a Reuters article that
recounts the offshore challenges Ketchum
mentions, including saltwater corrosion,
the threat of hurricanes, vessel availability,
the installation of subsea transmission
cables and supply chain issues.
Vital Energy Inc. And NOG
Buy Point Energy Assets
TULSA-Vital Energy Inc. has signed
a definitive joint purchase and sale agreement
to acquire the assets of Point Energy
Partners. The agreement was signed in
partnership with Northern Oil and Gas
Inc., under which the two companies will
acquire Point Energy's assets in an allcash
transaction for total consideration
of $1.1 billion. Vital Energy will acquire
80% of Point's assets, while NOG will
obtain the remaining 20%.
Vital Energy says the acquisition is
expected to add 68 gross inventory locations
(49 net) with an estimated average
breakeven oil price of $47 a barrel. The
assets include approximately 16,300 net
acres and net production of approximately
30,000 barrels of oil equivalent a day
(67% oil), as of the effective date.
Vital Energy adds that the transaction
will increase its Delaware Basin position
by approximately 25%. Post closing,
the Delaware Basin will comprise more
than one third of the company's oil production.
" This
bolt-on is a great fit for us,
adding high-value inventory and production
in the heart of our core operating
areas, " says Vital President and Chief
Executive Officer Jason Pigott. " Furthermore,
it expands our growing Delaware
Basin position and balances our Permian
operations. We expect to continue to
demonstrate our ability to capture, integrate
and create substantial value on acquired
assets through optimized development
plans, lower capital costs and
proven operating practices, resulting in
higher future cash flows. "
Vital says it expects the transaction to
close by the end of the third quarter, with
an effective date of April 1.
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" The crucial part of Ketchum's statement,
is, of course, 'the threat of hurricanes,' "
Bryce muses. " If GE's wind turbine
blades are coming apart now, during
a calm summer day, imagine the calamity
when a large hurricane slams the Eastern
Seaboard. The damage to turbines at
Vineyard Wind and other offshore projects
will be massive and the damage to beaches
and fisheries will be enormous. "
Bryce's article also features Nantucket
fisherman and former select board member
Bob DeCosta, who insists that offshore
wind projects' are exacting an environmental
cost that appears likely to
grow with time: " DeCosta is staggered
by the size of the wind turbines and furious
at how Nantucket's residents and
fishermen have been ignored. 'There are
other ways to produce energy without
doing this to our oceans,' he said. 'I
know a thing or two about the saltwater
environment. I can't imagine what it
will take to keep these things running in
salt water.' "
And what does DeCosta think a hurricane
will do to an offshore wind installation?
" We will be picking up the pieces
from this on the beaches at Nantucket
for the next 20 years, " Bryce quotes him.
" When this stuff is obsolete, who's going
to pay to remove it? They are talking
about a total of 1,400 of these things. "
But he is not giving up, Bryce adds.
" DeCosta told me the turbine blade failure
at Vineyard Wind is, in a way, good for
opponents like him. 'My hope is that we
make enough of a stink that they don't
put up any more of these things. We
aren't giving up,' " he concludes.
❒
Permian Resources Corp. Buys Occidental Properties
Permian Resources Corp. has agreed
to purchase 29,500 net acres, 9,900 net
royalty acres and 15,000 barrels of oil
equivalent a day from Occidental for
$817.5 million in a deal Permian Resources
predicts will close by the end of
the third quarter.
According to the company, the acquired
assets consist of 27,500 net acres
in Reeves County, Tx., and 2,000 net
acres in Eddy County, N.M. The operated
acreage position contains an average
working interest of approximately 65%
(8/8ths net revenue interest of about
80%) and is contiguous to Permian Resources'
positions in both Texas and
New Mexico.
Additionally, Permian Resources says
it has identified more than 200 gross
operated, two-mile locations with high
net revenue interests, and the company
says it expects to begin development
on the acquired properties during the
fourth quarter. Permian Resources adds
that it estimates total production for the
fourth quarter at 15,000 barrels of oil
equivalent (55% oil).
The Reeves County assets also include
a fully integrated midstream system, Permian
Resources says. Infrastructure on
the acquired assets includes more than
100 miles of operated oil and gas gathering
systems and more than 10,000 surface
acres, in addition to complementary water
infrastructure including saltwater disposal
wells, a recycling facility, frac ponds and
water wells.
" This acquisition is a natural fit for
us, given its high-return inventory and
proximity to our current operated position, "
says Permian Resources co-Chief Executive
Officer Will Hickey. " As the
Delaware Basin's low-cost leader, we are
SEPTEMBER 2024 83
highly confident that our team will be
able to leverage its operational expertise
of the asset to significantly reduce costs
and drive meaningful synergies, maximizing
value for our shareholders. "
" Our overarching goal is to drive value
for our investors, and this acquisition of
high-quality assets adjacent to our existing
position is a perfect example, " adds Permian
Resources co-CEO James Walter.
" Consistent with our strategy of pursuing
sound M&A opportunities, this bolt-on
acquisition adds core inventory which
immediately competes for capital and is
accretive to key metrics over both the
short and long term. Furthermore, the
substantial midstream infrastructure and
surface acres represent material value
and will provide us with significant flexibility
going forward. "
❒
COMING NEXT MONTH
SPECIAL REPORTS
Election 2024: Q&A and Analysis
Oil & Natural Gas Exports Update
Completion & Production Chemistry
Mid-Continent Playmakers
Advertising Files Due: September 20
American Oil and Gas Reporter - September 2024

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