RimRock Oil & Gas LP has sold its leasehold interest and related assets in the Williston Basin to Devon Energy Corp. for a total cash consideration of $865 million. RimRock is a portfolio company of funds managed by Warburg Pincus LLC, a leading global growth investor.
“RimRock was founded with the mission to apply modern technologies to optimize asset performance as a low-cost operator. The current commodity environment, combined with our high-performing assets and the support of our strong team, resulted in an incredible business that I am proud to have led,” said RimRock CEO James Fraser in a July 8 statement. “I would also like to thank Warburg Pincus for their partnership over the past 5 years and believe Devon Energy will benefit greatly from ownership of these assets moving forward.”
RimRock is an independent oil and gas company focused on the acquisition and development of North American oil and gas assets. Since its founding in 2016, RimRock operates nearly 200 wells, including 64 drilled wells and over 130 acquired operating wells. The company has over 38,000 net acres of total land holdings in the Williston Basin.
“RimRock successfully acquired and developed large-scale assets with meaningful production in the Williston Basin, leveraging the deep experience and expertise of its management team,” said Peter Kagan, Managing Director, Head of Energy, Warburg Pincus. “Over the course of our partnership, RimRock built a strategic acreage position with a sizable inventory of core drilling locations, developing a clearly differentiated asset in the Basin. We would like to thank Jim and the RimRock team for their hard work and dedication to create a strong business of scale and value,” added John Rowan, Managing Director, Warburg Pincus.
Wells Fargo served as financial advisor to RimRock in connection with the transaction, and Kirkland & Ellis served as legal advisor.
This transaction adds a contiguous position of 38,000 net acres (88 percent working interest) directly offsetting and overlapping Devon’s existing position in the Williston Basin. RimRock’s first-quarter production was approximately 15,000 barrels of oil equivalent (Boe) per day (78 percent oil), with volumes expected to increase to an average of 20,000 Boe per day over the next year. Devon estimates approximately $100 million of capital expenditures to be incurred post-closing in 2022. The transaction also adds more than 100 highly economic undrilled inventory locations, positioning the company’s Williston Basin assets to maintain high-margin production and strong cash flow for several years.
“This bolt-on acquisition is highly complementary to our existing position in the Williston Basin and is immediately accretive to our financially-driven strategy,” said Rick Muncrief, Devon Energy president and CEO. “RimRock’s directly adjacent acreage offers strong operational synergies, adds to our high-quality inventory in the core of the play and positions us to further increase the return of cash to shareholders.”
The transaction is subject to customary terms and conditions and is expected to close in the third quarter of 2022, with an effective date of April 1.Tags: Devon Energy Corp, mergers and acquisitions, RimRock Oil and Gas LP