Deal In Brief
Diamondback Energy Inc, an oil and natural gas exploration and production company, has completed acquisition of all leasehold interest and related assets of FireBird Energy LLC, an upstream company, for a purchase consideration of approximately US$1.597 billion in cash and stock transaction
The company has funded the transaction through issuance of 5.86 million shares per share and US$775 million in cash. The cash portion of this transaction is funded through a combination of cash on hand, borrowings under the Company’s credit facility and/or proceeds from a senior notes offering
The acquisition includes approximately 75,000 gross (68,000 net) highly contiguous acres (98.5% of acreage with an average 92% working interest) located in the Midland Basin, Texas, the US. The estimated production of the assets at closing is approximately 17 mbo/d (22 mboe/d). The assets target Middle Spraberry, Lower Spraberry, Wolfcamp A and Wolfcamp B formations. As of 2023 the production of the assets is estimated at an average of approximately 19 mbo/d (25 mboe/d) RBC Capital Markets and Goldman Sachs & Co. LLC acted as lead financial advisors to FireBird, Kirkland & Ellis LLP acted as legal advisor to Diamondback and Akin Gump Strauss Hauer & Feld LLP and Weil, Gotshal & Manges LLP acted as legal advisors to FireBird and its affiliates. Travis Stice, Chief Executive Officer of Diamondback, said “With over 350 locations adjacent to our current Midland Basin position, this asset adds more than a decade of inventory at our anticipated development pace, including inventory that competes for capital right away in Diamondback’s current development plan. Also, importantly, this transaction is accretive on all relevant 2023 and 2024 financial metrics, immediately increasing expected per share returns to our stockholders in the near-term while also improving the long-term duration of the Company’s cash return profile. We remain committed to capital discipline by returning at least 75% of our Free Cash Flow to stockholders while also maintaining a fortress balance sheet. To do this, we are today announcing a target to sell at least $500 million of non-core assets by year-end 2023, with proceeds earmarked for further debt reduction.” The transaction implies a value of US$72,600.91 per boe of net daily production
Deal history: Announced: On October 11, 2022, Diamondback Energy has entered into a definitive purchase agreement to acquire all leasehold interest and related assets of FireBird Energy, for a purchase consideration of approximately US$1.597 billion in cash and stock transaction.
|Deal Value (US$ Million) ||1597.22 |
|Deal Type ||Acquisition |
|Sub-Category ||100% Acquisition |
|Deal Status ||Completed: 2022-11-30 |
|Target (Company) ||Firebird Energy LLC |
|Acquirer (Company) ||Diamondback Energy, Inc. |
The transaction enables Diamondback Energy to expand its oil and gas assets base in Texas.
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