Summary
Diamondback Energy, Inc. (FANG) announced on July 21, 2014, that it has entered into a definitive purchase agreement to acquire significant leasehold interests in the Permian Basin, specifically in Midland, Glasscock, Reagan, and Upton Counties, Texas. The transaction, valued at approximately $538.0 million before adjustments, represents a substantial expansion of FANG's footprint in a core operational area. The acquired acreage totals 16,773 gross acres (13,136 net acres) and includes current production of approximately 2,173 BOE/d, with a significant 64% oil weighting, from 131 gross (94 net) wells. Furthermore, the acquisition comes with an estimated 5,202 MBOE of net proved reserves as of June 1, 2014. Upon closing, Diamondback will assume operatorship of roughly 88% of this newly acquired acreage, enhancing its control and operational efficiencies. The acquisition is anticipated to close in early September 2014, subject to customary closing conditions and due diligence.
Key Highlights
- 1Diamondback Energy to acquire ~13,136 net acres in the Permian Basin (Midland, Glasscock, Reagan, Upton Counties, TX) for ~$538 million.
- 2Acquisition includes current net production of ~2,173 BOE/d (64% oil) from 94 net wells.
- 3Estimated net proved reserves of ~5,202 MBOE as of June 1, 2014, associated with the acquired acreage.
- 4Diamondback to become operator of ~88% of the acquired acreage post-closing.
- 5Transaction subject to due diligence and satisfaction of other closing conditions.
- 6Expected closing date in early September 2014.
- 7Press release announcing the agreement was issued on July 21, 2014.