ASX-listed junior Elk Petroleum hopes to join the ranks of the leading oil stocks on the ASX after snapping up a majority stake in a Utah oilfield in a $200 million deal.

The company (ASX:ELK) has entered a purchase and sale agreement to acquire a subsidiary of Resolute Energy Corporation which holds a 63 per cent stake in Utah’s Aneth oil field, ranked the 86th biggest oil field in the US by proven reserves.

Under the deal, Elk would become one of the biggest oil producers on the ASX with forecast 2018 production of 11,000 barrels of oil per day.

Elk’s managing director Bradley Lingo said Aneth was one of the most significant oil projects in the United States and was excited by the opportunities for expansion.

“The field is highly complementary to Elk and represents an attractive opportunity to transform into one of the ASX’s leading oil companies and operators by reserves, production and cash flow,” he said.

The Aneth field has a long history of continuous oil production since the late 1950s with 448 million barrels production to date.

Navajo Nation Oil and Gas Company owns the remaining stake in the oil field.

Elk will partially fund the acquisition with a $US22 million ($27.5 million) placement to institutional, professional and sophisticated investors. The company will issue 443 million new Elk shares at 6.2c per share — a 22 per cent discount to last week’s closing price of 7.9c.

The remainder will be funded through $US98 million in debt and up to $US55 million equity to be provided by AB Energy Opportunity Fund subject to due diligence.

The acquisition is expected to be finalised in late October.

Elk last traded at 7.9c on Friday and has a market cap of around $64.25 million.