NEW YORK, July 28 (Reuters) – Vital Energy (VTLE.N), opens new tab is closing in on an all-cash deal to acquire private equity-owned Point Energy Partners for $1.1 billion, people familiar with the matter said on Sunday, a move that would extend a wave of consolidation in the U.S. oil and gas industry.
The deal for Permian Basin-focused producer Point Energy could be announced soon, possibly as early as Sunday assuming the talks do not hit a last-minute snag, the sources said, requesting anonymity as the matter is confidential.
Some of Point Energy’s assets will be sold to a different buyer that is participating in the transaction alongside Vital Energy, the sources said. Those assets are low-growth but produce steady amounts of oil and gas, the sources added.
The identity of the other acquirer could not be learned immediately.
Vital Energy, Point Energy and Vortus Investments, which owns Point Energy, did not immediately respond to requests for comment.
U.S. energy producers have been on a buying spree in recent years as they aim to take advantage of higher commodity prices and lock up the best drilling sites on a bet demand for oil and gas will remain robust in the medium to long-term.
Founded in 2017, Point Energy operates around 20,000 acres in the Delaware patch of the Permian Basin and produces around 40,000 barrels of oil per day equivalent, according to its website.
The low-growth acreage being bought by the third party is typically sought by oil and gas producers that specialize in operating such wells, or investment firms that can operate the assets without needing to pursue new exploration activity.
Tulsa, Oklahoma-based Vital Energy operates 266,000 net acres in both the Delaware and Midland portions of the Permian, the heart of the U.S. shale industry that stretches across Texas and New Mexico.
In September, Vital announced the acquisition of three smaller oil and gas producers for $1.17 billion.
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