NEW YORK – Hess Corp. (NYSE: HES) has agreed to acquire 167,000 net acres in the Bakken oil shale play in North Dakota from TRZ Energy LLC for $1.05 billion in cash.
The properties being acquired are located near Hess' existing acreage and have current net production of roughly 4,400 boe/d.
"This acquisition strengthens our leading land position in the Bakken, leverages our operating capabilities and infrastructure and will contribute to future reserve and production growth," said Greg Hill, president of Worldwide Exploration and Production at Hess.
On Tuesday, a UBS analyst commented on the purchase, calling it attractive at roughly $4,500 per acre after adjusting for 4.4 Mboed of production. "This is well below the $8,500/acre price paid by WMB [Williams] last week, the $5,000/acre paid for AEZ’s [American Oil & Gas] acreage, and other recent deal metrics of $5,500-$6,500/acre. The transaction will be funded by HES’ $2.4 billion cash balance at the end of 3Q, and is expected to close by year-end."
The transaction has an effective date of October 1, 2010 and is expected to close by December 28, 2010.
Hess Corp., with headquarters in New York, is a global integrated energy company engaged in the exploration, production, purchase, transportation and sale of crude oil and natural gas, as well as the production and sale of refined petroleum products.
Shares of the company were down -0.9800 (-1.406%) at US$68.71 late Tuesday morning.
