Texas-based Noble Energy has agreed to sell nearly 30,200 net acres from its non-core DJ Basin position in Colorado to SRC Energy for a sum of $608m.
SRC Energy, which is based in Denver, Colorado, is an independent operator in the DJ Basin.
In addition to the acreage, it will also add production of about 4,100 barrels of oil equivalent per day (Boe/d) in the assets located in Weld County.
SRC Energy chairman and CEO Lynn A. Peterson said: “This transaction solidifies SRC’s position as a leading DJ Basin operator with a deep inventory of efficient, high return development opportunities combined with a conservative balance sheet.
“The operating efficiencies that we have gained over the past few quarters will transfer smoothly to this new acreage. We will begin working on our expanded position immediately with planning, permitting and infrastructure buildout.”
The transaction is expected to be completed on two separate dates. While the acreage and non-operated production part is to be closed by the year end, the sale of the operated producing assets will be completed by mid-2018.
The two closings will be based on meeting of customary terms and conditions. Noble Energy disclosed that over 90% of the total transaction value will be covered in the initial closing.
Almost half of the acreage involved in the transaction is in the Greely Crescent area of Noble Energy while the remainder is located in the Bronco area.
According to Noble Energy operations executive vice president Gary W. Willingham, the acreage sold in Greely Crescent and Bronco development areas was not expected to be developed by the company for several years.
Noble Energy will stay focused on the northern and eastern parts of the DJ Basin.
Willingham added: “This is where we have a deep inventory of long lateral drilling opportunities in an oilier part of the basin and where our infrastructure provides a competitive advantage.
“Proceeds from this transaction continue to highlight a strong market valuation for our DJ Basin position and will be prioritized to further strengthen our investment-grade balance sheet.”