Denver-based QEP Sources announces $2.2B merger with Diamondback Electricity
2 min readTexas-based mostly Diamondback Vitality will acquire Denver oil and fuel business QEP Resources in a $2.2 billion deal introduced Monday. The merger will be an all-stock transaction.
The agreement with Diamondback, based in Midland, Texas, contains having on QEP’s internet debt of $1.6 billion, the providers said in a assertion. QEP Resources’ oil and gas operations are concentrated in the Permian Basin in Texas and the Williston Basin in North Dakota.
QEP’s North Dakota belongings will be utilised to crank out hard cash flow or will be divested, depending on industry situations, the providers reported. Diamondback is also obtaining Guidon Electricity in Midland for 10.63 million shares of Diamondback prevalent inventory and $375 million in hard cash.
Tim Cutt, QEP president and CEO, stated the merger with Diamondback together with the addition of the Guidon belongings delivers the company’s shareholders “an remarkable financial investment opportunity” as perfectly as enhanced capital efficiencies.
Diamondback’s acquisition of QEP matches in the mildew of consolidations of general public exploration and manufacturing providers in 2020, Andrew Dittmar, senior mergers and acquisitions analyst for Enverus, reported in a statement.
“The offer is structured with no top quality and all-inventory thing to consider. It focuses on right away boosting funds stream to fund shareholder capital returns and personal debt reduction,” Dittmar stated.
The focus of the QEP acquisition is its core acreage in the Midland Basin and its midstream, or transmission assets, he added.
“For QEP, announcement of the acquisition finishes a very long operate wherever they were usually discussed as a likely target, which includes rumored buyouts by personal investors,” Dittmar explained. “While bringing significant financial assets and supporting midstream infrastructure to the table, the company observed by itself in a tricky portion of the market place in which it is challenging to compete offered a absence of scale.”
