U.S. independent producer WPX Energy on Tuesday announced its acquiring privately-held RKI Exploration & Production for $2.75 billion including the assumption of $400 million of debt.
The majority of RKI’s leasehold is located in the Permian Basin, the Delaware Basin located Loving County, Texas, and Eddy County, New Mexico, where the company has four rigs deployed.
RKI’s liquids-rich assets include roughly 22,000 barrels of oil-equivalent per day (BOE/d) of existing production, more than half of which is oil; approximately 92,000 acres in the core of the Delaware – with roughly 98% held by production; more than 3,600 drilling locations across stacked pay intervals; and more than 375 miles of scalable gas gathering and water infrastructure
The acquisition metrics include roughly $1.1 billion for the existing production at $50,000 per flowing barrel, approximately $500 million for the established midstream infrastructure, which equates to an average of $12,500 per acre – or $1.15 billion – for the undeveloped locations.
“This is a transformative opportunity that fits perfectly with our strategy to increase our oil production and high-quality oil inventory,” said Rick Muncrief, WPX CEO. “RKI’s asset scale and concentrated acreage position allows for efficient, low-cost, multi-decade development in a world-class oil play.”
WPX has positions in the core of North Dakota’s Williston Basin, New Mexico’s San Juan Basin and Colorado’s Piceance Basin. WPX produced 169.1 Mboe/d in first-quarter 2015 and surpassed 50,000 barrels per day of total liquids (oil and NGL) production for the first time in the company’s history.