(Reuters) – Vital Energy Inc said on Friday it would acquire the Permian assets of Forge Energy II Delaware, an EnCap portfolio company, in an all-cash deal for $540 million.

The Permian is a major target for oil producers looking to build up their inventory. The shale patch, which lies between Texas and New Mexico, has the necessary infrastructure and is known for its high productivity and large untapped reserves.

Vital said it will acquire 70% of the assets for $378 million, and the third party will acquire the remaining 30% for $162 million.

The transaction is expected to close late in the second quarter of 2023 and is subject to customary closing conditions.

(Reporting by Arshreet Singh; Editing by Anil D’Silva and Shweta Agarwal)

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