Good morning, and thank you for joining us as we discuss NOG's joint acquisition of XCL Resources' Uintah Basin assets. Earlier this morning, we published a release and a presentation outlining details of the transaction. You can access these materials in the investor relations section of our website at noginc.com. Before I turn the call over to Nick O'Grady, our Chief Executive Officer, to discuss the acquisition, I'd like to go over our safe harbor language. Please be advised that our remarks today may include forward-looking statements within the meaning of the Private Securities Litigation Reform Act. These forward-looking statements are subject to risks and uncertainties that could cause actual results to be materially different from the expectations contemplated by our forward-looking statements.
Those risks include, among others, matters that have been described in our press release from this morning or in our filings with the SEC, including our annual report on Form 10-K and our quarterly reports on Form 10-Q. We disclaim any obligation to update these forward-looking statements. With that, I'll turn the call over to Nick.
Thank you, Evelyn. Good morning, and thank you all for joining us for this exciting announcement and for your interest in our company. Earlier today, NOG announced the joint acquisition of XCL Resources' Uintah Basin assets with SM Energy. The total consideration is $2.55 billion, and NOG's undivided interest represents 20% of the total for $510 million. This acquisition, the largest in NOG's history, is also, we believe, the most important thus far. With it, we are establishing a scaled presence in the Uintah Basin, an opportunity-rich play combining the productivity of Delaware with the attractive cost structure of the Midland. The Uintah has more zones across a thicker column, which translates to significant development opportunities, and the XCL assets are located in the best, highest-pressured part of the play.
From an economic perspective, the Uintah rivals the best in the lower 48, with breakevens consistently averaging below $50 on this Tier 1 asset. As has been our practice to date, underwriting for this asset is primarily based on current production, wells in process, and limited future inventory. We believe there is significant value that was not underwritten in the Upper Zones, Deep Cube, and Lower Cube infill locations. So what exactly did we buy? An undivided interest alongside SM, an operator that has a long history with NOG, historically in the Williston and more recently in the Permian. Our share of the transaction gives us over 9,300 net acres, currently producing over 10,500 BOE per day. The asset is self-funding and has an extremely high oil cut of over 85%, with an average net revenue interest of 80%.
Overall, this acquisition will provide a new avenue of growth for NOG, with over a decade of continuous development on the 97.6 net undeveloped locations we underwrote, with the potential for further upside. We anticipate, as we have demonstrated in the Permian and in all the basins in which we own assets, that over time, NOG will further scale our footprint in the Uintah through ground game or other bolt-on opportunities. Structurally, XCL resembles recent joint venture transactions such as Novo and Forge, where we aligned ourselves with capable and efficient operators. And like those precedent transactions, we have overlaid conditions to the joint venture that will protect our shareholders' capital and underwritten returns through strong governance.
These conditions are memorialized in our joint development agreement and in the area of mutual interest agreement that enables NOG to grow in the basin alongside SM, according to our respective proportionate share if they choose to further expand their interest in adjacent lands. We estimate that the $510 million purchase price implies a less than 3x enterprise to unhedged unlevered cash flow multiple. Based on our underwriting, we estimate the asset will generate more than $170 million of cash from operations over the next 12 months and over $85 million of free cash flow on an unlevered unhedged basis based on recent strip prices and assuming an October 1st start date. With respect to funding, we can easily fund our 20% interest with cash on hand and the available capacity on a revolving line of credit.
We do not have to turn to the capital markets to close this transaction. On the contrary, given the strong cash generation of this and our base assets, we want the flexibility to repay this debt quickly compared with the negative carry associated with term debt. On a pro forma basis, XCL will flex up our net debt modestly, but given the strong free cash flow profile of the asset and the rest of our portfolio, we anticipate that our leverage will organically return to about 1x over the next 12 months based on the current pricing outlook. We will continue to layer in hedging over time to secure this outlook. We anticipate approximately $85 million of capital expenditures for NOG over the next 12 months on these assets, with about $45 million occurring in 2024 after closing.
The transaction is expected to close in late Q3 or early Q4, subject to the satisfaction of closing conditions, and will have an effective date of May 1st, 2024. On a pro forma basis, the Uintah will represent approximately 8%-9% of our annual production volumes going forward. We are extremely excited about the XCL transaction and believe it represents the most accretive transaction to key financial metrics in NOG's history. This transaction is indicative of the type of opportunities we choose to evaluate and are uniquely situated to play a role in as the largest, best-capitalized, and most reliable non-operated working interest owner in the United States.
Even with the success of winning XCL with our partner, our pipeline remains extremely active, and we believe it will remain that way as the news of this transaction is digested by others looking for the right kind of capital partner to help them achieve their strategic goals. We look forward to working closely with the SM team to deliver value for our collective shareholders. This is an important transaction for both companies, and we are fully aligned to making it a mutual success. We are an upstream business like no other, a lean model that makes more money on the dollars we spend than traditional E&P businesses, but with strong avenues to deliver growth to profits for investors that the sector in many cases sorely lacks. "By investors for investors" isn't just a tagline, but it's borne out in facts, return on capital statistics, and market performance.
When we announced our Marcellus transaction in 2021, we described to our investors the vision of evolving into a national non-operated franchise with low leverage, strong free cash flow, growing cash returns, and diversification by both region and commodity mix. We believed then, as we do now, that this model would deliver better total return for our investors. Since that announcement, our equity has outperformed the main upstream ETF index by over 140%. The XCL transaction only furthers what we envisioned then and in many ways helps solidify and complete the goals set forth to build a superior investment product for you. And we believe, as we did then, that this transaction will translate into further market outperformance going forward. Thank you for joining us today. If you would like to further discuss the transaction, please reach out to Evelyn to set up a time.
Thanks again and have a great day.