Special purpose acquisition Co. buys into Bakken for $1.7B

By Luke Geiver | November 07, 2018

A SPAC has entered the Williston Basin. Vantage Acquisition Operating Company LLC, a special purpose acquisition company formed by former exploration and production executives, has acquired the Williston Basin assets of QEP Resources. The deal, expected to close in early 2019, is valued at $1.725 billion and includes QEP’s South Antelope and Fort Berthold leasehold positions.

After raising $552 million in 2017 for the purpose of acquiring a leasehold position in a major shale play, the Vantage team will now be focused on further developing the assets developing by QEP, including wells targeting multiple pay zones of the Middle Bakken and one bench of the multi-layer Three Forks formation.

More than two-thirds of the production included in the asset acquisition is oil-weighted. The margins on the producing assets is roughly 10 to 20 percent for free cash flow yields, there is a 5 to 10 percent production growth possibility and a possible initial dividend of 2.5 percent to investors involved with Vantage.

Vantage believes the rock quality attained in the deal offers good porosity and hydrocarbon saturation that is all highly predictable across the geology of the entire QEP field. The assets also allow for new technology advancements to increase well productivity in wells placed in established fields along with the possibility for refracks on previously drilled and completed wells.

Roger Biemans, former executive for EnCana Oil & Gas, will lead the team as it develops more than 100,000 acres in the core of the Bakken.

QEP Resources will use the proceeds from the sale to further develop is Permian Basin asset portfolio. “The Williston Basin assets have been a significant contributor to QEP for many years and were critical in our pivot towards a more oil-focused portfolio,” said Chuck Stanley, president and CEO of QEP. “This transition marks an important milestone in simplifying our asset portfolio as we continue on our path to becoming a Permian pure-play operator.”