hopefully Baytex is next, nothing would be better than to see this stop trading pending news
Tuesday's $9.2 billion deal by Diamondback Energy to acquire Energen may be part of a general push in the energy industry toward consolidation, analysts say.
As the Houston Chronicle notes, it was Diamondback's second big deal in a week and its third $1 billion-plus acquisition in West Texas in less than a month. A week ago Diamondback bought out Houston-based Ajax Resources for $1.2 billion. Now Diamondback holds about 390,000 net acres in the Permian basin, a large oil and natural gas producing area in Texas and New Mexico.
The all-stock transaction was unanimously approved by each company's board of directors and includes Energen's net debt of $830 million. It should close by the end of the fourth quarter.
Energen Chairman and CEO James McManus said the deal "will form an even stronger, large-cap independent producer uniquely positioned to drive growth and development in the Permian Basin."
By acquiring about 150,000 acres in two weeks, the deals give Diamondback a prime position in the area that supplies almost a third of U.S. crude oil production.
"With most of the best acreage already spoken for, the only option for companies looking to enter or expand in Permian is to buy up other firms," the Chronicle wrote.
An analyst quoted by Reuters said the purchase brings together two companies with holdings in the same areas of the Permian potentially allowing for longer horizontal wells, shared labor and equipment.
Oil production volumes in the Permian are expected to pick up in mid-2019 as pipelines under construction come online.
The acquisition came months after fund manager Keith Meister of Corvex Management, along with billionaire investor Carl Icahn made moves toward buying the Birmingham-based company.
https://www.al.com/business/index.ssf/2018/08/what_diamondbacks_acquisition.html