Diamondback Energy has entered into a definitive purchase agreement to acquire all leasehold interests and related assets of Brigham Resources Operating, LLC and Brigham Resources Midstream, LLC, for an aggregate purchase price of $2.43 billion, consisting of $1.62 billion in cash and 7.69 million shares of Diamondback common stock, subject to certain adjustments.

Upon completion, the pending acquisition will provide Diamondback with primarily operated leasehold interests on 76,319 net acres in Pecos and Reeves counties, Texas, and will bring Diamondback’s total leasehold interests to approximately 182,000 net surface acres in the Permian basin.

Travis Stice, CEO of Diamondback, said, “This acquisition is expected to be immediately accretive on operational and financial metrics, and the existing production allows Diamondback to grow volumes on a pro forma basis without compromising balance sheet integrity. We feel that the single well economics of over 100% internal rates of return at today’s commodity prices on this acreage compete for capital in the top quartile of our existing inventory and are comparable to the acreage we acquired in July 2016 in the Southern Delaware basin.”

“With Diamondback’s proven ability to execute, we now believe we have the resource and acreage base to efficiently support 15 to 20 operated rigs. In addition to our soon to be added sixth rig that will begin developing our previously acquired acreage in the Delaware basin, we plan to add two additional rigs to develop this pending acquisition in 2017,” Stice added.

Gene Shepherd, CEO of Brigham Resources, said, “This transaction represents a unique opportunity to place our Southern Delaware basin assets in the hands of one of the premier value creators and operators in the Permian basin. I am proud of what the Brigham team accomplished over a few short years in identifying, capturing and developing a large and highly economic inventory of drilling locations across the multiple Wolfcamp and Bone Spring objectives.”

The acquisition is expected to close at the end of February, and the effective date of the transaction is Jan. 1, 2017.

Source: www.worldoil.com