SM Energy (SM.US) announced on Thursday that it has agreed to participate in the acquisition of oil and gas assets in the Uinta Basin of Utah from XCL Resources. XCL Resources is a private company supported by EnCap Investments and Rice Investment Group. Northern Oil and Gas (NOG.US) will purchase 20% of XCL's oil and gas assets for $510 million in cash, while SM Energy will acquire an undivided 80% interest in the assets for a net purchase price of $2.04 billion, totaling $2.55 billion in cash.

SM Energy said that the assets acquired in this transaction include 372,000 net acres (approximately 99% of which are operated), increasing the net core asset area of the company by 14%. The production is 43,000 barrels of oil equivalent per day, which is expected to increase the company's net production to 195,000 barrels of oil equivalent per day by 2025, with a petroleum blending ratio of over 50%.

SM Energy stated that the Uinta Basin has abundant oil production potential and high oil content, which, combined, create top-tier well performance and inventory. The company added that its record in full-stack joint development provides potential to create differentiated value across as many as 17 blocks.

SM Energy also announced that its board of directors has approved an increase in the company's fixed quarterly dividend to $0.20 per share, expected to begin in the fourth quarter of 2024. The board has also authorized a new $500 million share buyback program to be implemented before 2027, replacing the existing remaining plan.