Oasis to Buy North Dakota Acreage for $1.52 Billion

Oasis Petroleum Inc. (OAS), the Houston-based oil producer founded in 2007, signed four separate agreements totaling $1.52 billion to add to its North Dakota acreage and boost output.

The acquisitions encompass about 161,000 net acres, expanding the company’s holdings by 49 percent to 492,000 acres, Oasis said in a statement today. Oasis didn’t identify the sellers and said it expects the deals to close in early October.

“These acquisitions add high quality acreage in the heart of the Bakken and Three Forks play, providing incremental scale to our premier position in the Williston Basin,” Chairman and Chief Executive Officer Thomas B. Nusz said in the statement. “As we enter full development mode, our size and scale will continue to drive growth, efficiencies and shareholder value.”

North Dakota’s oil output has more than doubled in the past three years as producers tap shale formations. The acquisitions would make Oasis the state’s seventh-largest acreage holder, according to data compiled by Bloomberg Industries.

Oasis will increase the number of rigs drilling on the combined acreage to as many as 16 by the end of next year, from 13 today.

The company paid a “very reasonable” price, Scott Hanold, an RBC Capital Markets LLC analyst based in Minneapolis, wrote today in a note to clients. The company probably will sell shares to finance part of the purchase, he wrote.

Oasis’ revolving credit facility was boosted to $1.5 billion from $1.25 billion based on its reserves, as four lenders joined the bank group, the company said.

Oasis fell 2.7 percent to $38.54 at 9:50 a.m. in New York. The shares have gained 21 percent this year. The company was formed six years ago by Nusz and Chief Operating Officer Taylor Reid, with funding from private-equity firm EnCap Investments LP.

(Oasis will hold a conference call on the transactions at 10 a.m. New York time accessible at +1-877-621-0256 or +1-706-634-0151, passcode 54145452.)

To contact the reporter on this story: Jim Polson in New York at jpolson@bloomberg.net

To contact the editor responsible for this story: Susan Warren at susanwarren@bloomberg.net

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