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Energy Giant Baytex Makes a Bold Move: Snaps Up Ranger Oil in $2.5 Billion Deal
04/06/2023
Baytex Energy Group has announced that it will acquire Eagle Ford exploration and production company, Ranger Oil, for approximately $2.5 billion in cash and stock, which includes taking over the company's existing debt.
Upon the successful closure of the acquisition, Baytex will have a controlling stake of approximately 63% in the newly merged company, leaving Ranger shareholders with around 37%. This significant move is in line with a trend of substantial mergers and acquisitions in the Eagle Ford area, with Marathon Oil, Devon Energy, and Chesapeake Energy among the companies involved in recent transactions.
Baytex is all set to acquire Ranger Oil, with the deal scheduled to close in the second quarter of 2023. The CEO of Baytex, Eric T. Greager, is excited about the move and expects it to work wonders for the company's financials.
The acquisition opens up a world of opportunities for Baytex, with Ranger Oil's inventory now competing for capital within their portfolio. This creates the potential for up to 15 years of oil-weighted drilling locations, a massive boost for Baytex's growth prospects. Moreover, the acquisition adds Eagle Ford scale to Baytex's existing non-operated position in the Karnes Trough.
The key details of the Baytex-Ranger Oil deal are:
- The acquisition covers 162,000 net acres in the crude oil window of the Eagle Ford shale, with a significant presence in Gonzales, Lavaca, Fayette, and Dewitt counties in Texas.
- The deal will add between 67,000 boe/d to 70,000 boe/d to Baytex's production, with 72% light oil, 15% NGLs, and 13% natural gas.
- The acquisition also results in a boost in the company's proved reserves by 174 MMboe.
- Baytex CEO, Eric T. Greager, believes the acquisition will provide a more durable business with a lower breakeven WTI price and bring meaningful per-share accretion on all metrics.
Quick Facts: Baytex Energy Group's Operations in Eagle Ford Shale
- Baytex Energy Group has a significant presence in Eagle Ford, which includes 19,900 acres of net contiguous land holdings.
- In the FY/2022, the company recorded a production of 28,200 barrels of oil equivalent per day.
- Baytex's assets comprise non-operated working interests in four areas of mutual interest (Sugarloaf, Longhorn, Ipanema, and Excelsior), with an average working interest of roughly 25%. The company deploys hydraulic fracturing techniques to extract oil from horizontal wells.
- In 2023, Baytex plans to bring approximately 15 net wells into production.
According to Baytex, there are currently 741 net undrilled locations available for oil exploration and production, which would provide an inventory life of 12 to 15 years. These locations are in direct competition for capital within Baytex's portfolio. Out of the 741 locations, 523 are high-quality opportunities located in the Lower Eagle Ford, with the remaining 218 opportunities located in the Upper Eagle Ford and Austin Chalk formations.
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Ranger Oil Acquisition by Baytex: Boosting Shareholder Returns and Introducing Dividend with Improved Free Cash Flow in Eagle Ford Operations
Baytex Energy, a Canadian oil and gas company, has announced its acquisition of Ranger Oil, an Eagle Ford operator based in Texas, in a deal worth $150 million. The acquisition will accelerate Baytex's shareholder returns and introduce a dividend with enhanced free cash flow.
Callon Acquires $1.1 Billion Delaware Assets and Bows Out of Eagle Ford - Here's What You Need to Know
Callon is set to purchase Percussion Petroleum's Delaware assets for $475 million while selling its Eagle Ford assets to Ridgemar for $655 million. In a strategic step to optimize its operations, Callon Petroleum recently made headlines by sealing two deals on May 3, totaling a staggering $1.13 billion. The company is taking confident steps to bolster its presence in the Delaware Basin while bidding farewell to its stake in the Eagle Ford Shale.
Kinetik Holdings recently announced a series of transactions in the energy sector. They struck a deal to buy Durango Permian infrastructure for $765 million. At the same time, they're selling their 16% share in the Gulf Coast Express Pipeline to ArcLight Capital Partners for $540 million. The total purchase cost includes $510 million in cash paid immediately and an additional $30 million that will be paid later, depending on whether they decide to expand further.
Recently, the Permian has seen significant acquisitions: Exxon Mobil purchased Pioneer Natural Resources for about $60 billion. Diamondback Energy's $26 billion deal to acquire Endeavor Energy Resources is currently on hold due to requests from the U.S. Federal Trade Commission. Occidental’s acquisition of CrownRock for $12 billion in the Midland.
EOG Resources is pushing boundaries in Ohio's Utica oil play and now drilling on the Sable pad, also located in Noble County. This site features the 3.7-mile lateral currently under construction. The company's first multi-well pads in the area Timberwolf and Xavier have each produced over 200,000 barrels of oil since their inception—Timberwolf in August and Xavier in October. A third site, the four-well White Rhino pad in Noble County, is also showing promising early results, according to Keith Trasko, EOG’s Senior Vice President of Exploration and Production, who noted the wells are performing as expected in their initial weeks.