Vital Energy Announces Deal to Acquire the Assets of Forge Energy II
TULSA, OK, (GLOBE NEWSWIRE) -- Vital Energy, Inc. (NYSE: VTLE) ("Vital Energy" or the "Company") today announced the signing of a definitive joint purchase and sale agreement to acquire the assets of Forge Energy II Delaware, LLC ("Forge"), an EnCap portfolio company, further expanding the Company’s Permian Basin focus and establishing a core operating position in the Delaware Basin.
The agreement was signed in partnership with a third party, with the companies jointly agreeing to acquire Forge’s assets in an all-cash transaction for total consideration of $540 million. Vital Energy agreed to acquire 70% of the assets for $378 million and will operate the asset, with the third party acquiring the remaining 30% for $162 million. Vital Energy plans to fund the acquisition through the use of its credit facility. The transaction is expected to close in late second-quarter 2023 with an effective date of March 1, 2023, subject to customary closing conditions.
"This accretive acquisition is attractively priced and significantly expands Vital Energy’s Permian focus, adding a core operating area in the Delaware Basin," stated Jason Pigott, President and Chief Executive Officer. "We have a proven track record of building value through our disciplined acquisition strategy. Today’s deal significantly enhances our outlook for Free Cash Flow generation which we will use to pay down debt and strengthen our balance sheet."