* Deal to raise output by nearly 30 pct
* To add 161,000 net acres with deal, taking holdings to
* Shares up 5 pct at midday
By Swetha Gopinath
Sept 5 Oasis Petroleum Inc will buy oil
and gas assets in the Williston Basin in North Dakota from a
clutch of sellers including Magnum Hunter Resources Corp
for about $1.52 billion, boosting its production by nearly a
Oasis, which signed four separate deals, will add about
161,000 net acres to the 331,000 net acres it already holds.
Production will increase by 9,300 barrels of oil equivalent
(boe) to 43,000 boe.
The deal value works out to about $7,000 per acre, assuming
daily production at $60,000 boe per day, said Eliecer Palacios,
chief executive at PetroRock Energy, a global investment
management and advisory firm.
The price compares favorably as Oasis has been valued at
$11,000 per acre, Palacios said.
Oasis shares were up 5 percent at $41.58 at midday on the
New York Stock Exchange.
Magnum Hunter in a regulatory filing said on Wednesday it
signed an agreement with Oasis to sell a non-operated working
interest in certain oil and gas properties in North Dakota for
about $32.5 million.
Richard Robuck, an Oasis spokesman, confirmed that the deal
with Magnum Hunter was one of the four agreements announced on
Thursday, but did not name the other sellers.
The company said in a regulatory filing on Thursday that it
had acquired 136,000 net acres from a private seller.
Oasis said it expects to keep production levels at the
acquired assets relatively flat through the end of 2013. The
four deals are expected to close in October.
The company plans to ramp up drilling across its combined
position next year, operating 15 to 16 rigs by the end of 2014.
Oasis operates 11 rigs currently. Oasis two rigs were being
operated by the sellers, without naming them.
The shale revolution has made North Dakota the most prolific
oil-producing state after Texas and contributed to a U.S.
revival in output. The state's production exceeds that of
countries such as Britain and OPEC member Ecuador.
Whiting Petroleum Corp last week bought nearly
40,000 acres of land in the Bakken shale formation for $260
million, while Triangle Petroleum Corp last month
purchased assets in the Williston Basin from Kodiak Oil & Gas
SunTrust Robinson Humphrey analysts said the price paid by
Oasis was "somewhat favorable" compared to these transactions.
"As some have been concerned about (Oasis) stepping outside
the (Bakken) to bolster inventory, this announcement could cause
some to breathe a sigh of relief," the analysts said.
Oasis said it had increased its borrowing base to $1.5
billion from $1.25 billion.
Oasis' debt to earnings before interest, taxes,
depreciation, and amortization ratio is just about 1.2 times on
2014 estimates, making it one of the best balance sheets in the
exploration and production group, said Palacios.