Published: December 28, 2020 |

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[Click image to enlarge]

US-based Diamondback Energy has agreed to acquire oil and gas exploration and production firm QEP Resources in an all-stock transaction worth nearly $2.2 billion.

Under the terms of the agreement, QEP stockholders will receive 0.05 shares of Diamondback common stock in exchange for each share of QEP common stock.

The transaction price indicates an indirect value of $2.29 per share to each QEP stockholder, based on the closing price of Diamondback common stock on December 18, 2020 and includes QEP’s $1.6 billion net debt.

Having unanimously approved by the boards of directors of Diamondback and QEP, the transaction is planned to be completed in the first quarter or early second quarter of next year. The closing of the transaction is subject to the approval of QEP stockholders, satisfaction of certain regulatory approvals and other customary closing conditions.

“The acquisition of QEP also checks every box of Diamondback’s corporate development strategy. The business combination with QEP and the Guidon transaction are accretive on all relevant 2021 financial metrics including free cash flow per share, cash flow per share and leverage, even before accounting for synergies,” said Diamondback Chief Executive officer Travis Stice.

“Most importantly, the addition of this Tier-1 resource competes for capital right away in Diamondback’s current portfolio, and we will now be able to allocate most of our capital to the high-returning Midland Basin for the foreseeable future,” added Stice.

Once the transaction is closed, Diamondback stockholders are expected to hold around 92.8 percent ownership in the combined company, while QEP stockholders nearly 7.2 percent.

Diamondback would continue operating from its headquarters in Midland, Texas, with its board of directors and executive team continuing without any changes.

With the acquisition, Diamondback’s total leasehold interests would surpass more than 276,000 net surface acres in the Midland Basin.

“We believe that this strategic merger with Diamondback, along with the addition of the Guidon assets, provides our shareholders with an exciting investment opportunity, now and in the future,” said QEP President and Chief Executive Officer Tim Cutt.

“The large contiguous Tier-1 acreage position in the Northern Midland Basin is expected to lead to operational synergies and deliver capital efficiencies beyond what each company could achieve independently. I believe in this combination and look forward to being a long-term shareholder and watching the value of the company grow with time,” added Cutt.

“I also want to take this opportunity to recognize QEP’s employees and publicly thank them for their dedication and hard work in driving QEP’s success. Their tireless efforts over the past several years led to a culture of peer leading operational excellence, safety and efficiency,” concluded Cutt.

Source: NS Energy

About Diamondback Energy
Diamondback is an independent oil and natural gas company headquartered in Midland, Texas focused on the acquisition, development, exploration and exploitation of unconventional, onshore oil and natural gas reserves in the Permian Basin in West Texas. Diamondback’s activities are primarily focused on the horizontal exploitation of multiple intervals within the Wolfcamp, Spraberry, Clearfork, Bone Spring and Cline formations.

To stop by Diamondback’s website, CLICK HERE

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