Denver’s SM Energy Co. on Monday said it has finalized a $500 deal to sell the majority of its assets in Wyoming’s Powder River Basin to a new Denver company run by an industry veteran.
SM said it will use the money to pay down debt and other general purposes. The deal was previously announced in January.
SM sold about 112,200 contiguous acres of mineral rights in Wyoming, about 80 percent of the company’s position in the Powder River Basin. Wells on the land produced an average of 2,200 barrels of oil equivalent per day in December 2017.
The buyer is Northwoods Operating LLC, a new company led by veteran Denver-area oilman Tom Tyree, who was co-founder, president and CFO of Arapahoe County-based Vantage Energy from 2006 to 2016 and before that was CFO of Bill Barrett Corp.
He is currently on the board of Bonanza Creek Energy.
When the deal was announced in January, Tyree said he believed the Powder River Basin “has some of the best geology of any play in the Lower 48 and that Northwoods has a tremendous opportunity to develop this highly contiguous, core acreage position.”
Northwoods in January said Apollo funds had committed to invest up to $850 million in the company.
SM CEO Jay Ottoson said in January the company was selling the Wyoming acreage to focus on its “top tier” assets in Texas. After the sale, SM expects its debt will be reduced from $2.5 billion to $2 billion.
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