BREAKING NEWS: Colorado-based SM Energy is Spending $2.55 Billion to Acquire 37,200 Acres of Oil/Gas Producing Land in Utah's Uninta Basin from XCL Resources

UPDATE: Concurrently, SM Energy is selling 20% of XCL Resources to Northern Oil and Gas (NYSE:NOG) for $510 million.

Early yesterday (Thursday, 27 June 2024), Denver, Colorado-based SM Energy Company (NYSE:SM) announced it will spend $2.55 billion to acquire 37,200 acres of oil- and gas-producing land in Utah's Unita Basin region from XCL Resources.

UPDATE: In a separate yet related transaction, SM Energy is selling 20% of XCL Resources to Northern Oil and Gas (NYSE:NOG) for $510 million, leaving SM Energy as the 80% super majority owner of XCL Resources.

According to the SM Energy news release, the land it is acquiring in northeastern Utah currently produces the equivalent of 43,000 barrels of oil and gas/day, with 88% of being oil production or ~38,000 barrels of oil).

As noted in the slide above, prior to this acquisition, SM Energy's assets were based in

• The Midland Basin in west-central Texas, and
• In south-eastern Texas.

On a 12-month trailing basis, SM Energy had $2.26 billion in revenue and is currently valued at $5.0 billion.

As noted in the release, this is an all-cash acquisition, as SM Energy " ... plans to finance the acquisition through a combination of debt and cash on hand."

Although only announced yesterday, the acquisition was effective 01 May 2024 and is expected to close "... in September 2024, subject to customary closing conditions."

For readers interested in diving into the details behind this acquisition, I invite you to

• Read the SM Energy acquisition news release, or
• Turn to its presentation highlighting the acquisition.

UPDATE

In case you didn't see it, here's a link to the Wall Street Journal writeup about this deal — "Private-Equity Exit Wave Surges Past the Permian Basin Oil Patch" — goes into a deep-dive on this and other non-Texas-related oil and gas acquisitions in the recent past.

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