SM Energy exiting Williston Basin for Permian
SM Energy is attempting to exit the Williston Basin. The independent exploration and production firm that sold roughly 55,000 net acres to Oasis Petroleum for $785 million in October last year has now announced plans to sell its remaining Divide County acreage. The company has brought in Tudor, Pickering, Holt & Co., to help with the bidding process.
Should an appropriate bid be received, SM Energy expects a sale to be complete by mid-2017. The Permian Basin will now be the main focus of the company after it has sold all of its Williston Basin assets along with others in the Eagle Ford shale play.
“Over the next five years, we intend to focus on generating significant high margin production growth from our operated acreage positions in the Midland Basin and Eagle Ford,” said Jay Ottoson, president of SM Energy. “We expect that the sale proceeds from this planned exit of the Williston Basin and from the pending sale of our non-operated Eagle Ford assets will allow us to fully fund our drilling program, while providing us with significant liquidity and the ability to reduce our outstanding debt.
In February 2016, the company said it intended to focus on the Williston Basin and the Permian Basin in the future. In Divide County, the company had been running one or two drilling rigs and completing wells for $4 million. The company currently has field offices in multiple North Dakota communities, including Crosby, Williston, Watford City and Belfield. Throughout the region, which includes Sidney, Montana, the company employs more than 80.
Although SM Energy had found success in Divide County, most industry experts consider the area outside the main tier acreage of the Williston Basin.
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