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Bakken Oil Acquisitions

Brian Hicks

Written By Brian Hicks

Posted August 30, 2012

North Dakota’s seeing a fair bit of movement. A QEP Resources (NYSE: QEP) unit completed two agreements to acquire oil-development properties in the Williston Basin; the overall deals are worth $1.38 billion.

Unit Corp. (NYSE: UNT) embarked on two agreements to sell part of its oil and natural-gas assets for $268 million, which includes its interest in some properties included in the QEP deal. And finally, Black Hills Corp. (NYSE: BKH) will be selling 85 percent of its Bakken and Three Forks shale assets in the Williston to QEP for $243 million.

QEP has been clamping down on expenditures on dry natural-gas plays while expanding into oil and liquids-rich zones. The North Dakota properties in question are about 12 miles west of QEP’s primary operations in Williston.

The company has hiked its 2012 expectations for earnings prior to interest or taxes to reflect these acquisitions. It now expects between $1.4 to $1.45 billion. QEP also expanded its capital spending plan by $50 million, so that’s now between $1.5 to $1.55 billion.

The deals are expected to close some time late next month, and they have a current net production of 10,500 barrels of oil equivalent per day. They also have a combined net proved and probable reserves to the tune of 125 million barrels of oil equivalent, 81 percent of which is comprised of crude.

QEP shares remained at $27.18 in some after-hours trading on Thursday, following the announcement, after an initial spike of 1.4 percent. Unit Corp. closed on Thursday at $41.24, and Black Hills closed at $31.01.

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