Permian Resources Corporation (NYSE: PR) has announced a definitive agreement with Occidental (NYSE: OXY) to acquire approximately 29,500 net acres, 9,900 net royalty acres, and production of around 15,000 Boe/d. The assets are predominantly located adjacent to Permian Resources' existing operations in Reeves County, Texas. The acquisition is valued at $817.5 million, subject to customary post-closing adjustments. The effective date is July 1, 2024, with closing expected by the end of the third quarter of 2024.
"This acquisition is a natural fit for us given its high-return inventory and proximity to our current operated position," said Will Hickey, Co-CEO of Permian Resources. James Walter, Co-CEO of Permian Resources added, "Our overarching goal is to drive value for our investors... this bolt-on acquisition adds core inventory which immediately competes for capital and is accretive to key metrics over both the short and long-term."
The acquired assets include substantial midstream infrastructure such as over 100 miles of oil and gas pipelines and a water recycling facility with a capacity of approximately 25,000 Bbls/d. The valuation stands at approximately 3.4x estimated EBITDAX for 2025 and a free cash flow yield of around 17%. Permian Resources plans to finance the acquisition through equity and debt while maintaining leverage at approximately 1x net debt-to-EBITDAX.
The transaction aligns with Permian Resources' strategy of pursuing sound M&A opportunities that provide significant accretion to per share metrics over the long term.
Permian Resources will release detailed second-quarter results on August 6, 2024.
Permian Resources is an independent oil and natural gas company based in Midland, Texas. For more information visit www.permianres.com.