Permian Resources Corporation announced a definitive agreement for the acquisition of Earthstone Energy. The acquisition will be an all-stock transaction valued at $4.5 billion, according to an Aug. 21 news release.
"After evaluating over $20 billion of potential transactions during the past 12 months, we firmly believe the acquisition of Earthstone represented the best transaction for Permian Resources,” James Walter, co-CEO of Permian Resources, said in the release. "It checks all the boxes, enhancing shareholder value while improving upon an already best-in-class company."
Each share of Earthstone common stock will be exchanged for a fixed ratio of 1.446 shares of Permian Resources common stock. With 400,000 Permian net acres, a pro forma production of approximately 300,000 Boe/d1 and a free cash flow profile, the business deal makes Permian Resources a leading Delaware Basin, the release reported.
“We believe the acquisition of Earthstone represents a compelling value proposition for our shareholders and strengthens our position as a premier Delaware Basin independent E&P,” Will Hickey, co-CEO of Permian Resources, said in the release. “Earthstone’s Northern Delaware position brings high-quality acreage with core inventory that immediately competes for capital within our portfolio.”
“We believe this all-stock transaction provides Earthstone’s shareholders with excellent value for their investment now and in the future,” Robert Anderson, president and CEO of Earthstone, said in the release. “In less than three years, we have grown Earthstone from a small-cap E&P company producing approximately 15,000 Boe per day to one with a production base of over 130,000 Boe per day, delivering significant value enhancement for shareholders along the way. Our success directly reflects our outstanding employees’ dedication, hard work and perseverance. I personally thank each and every one of our employees. I could not be prouder of the Earthstone team and the company we have built together.”
Permian Resources is an independent oil and natural gas company in Midland, Texas, that concentrates on acquiring, optimizing and developing profitable oil and natural gas properties, the release reported. The company's assets and operations are situated in the central area of the Delaware Basin.
Earthstone Energy is an independent energy company focused on acquiring, developing and operating oil and natural gas properties with a growth-oriented approach. Its main assets are situated in the Permian Basin of New Mexico and West Texas, according to the release.