Permian Resources Corp.
PR,
plans to acquire Earthstone Energy Inc.
ESTE,
in an all-stock transaction valued at approximately $4.5 billion, inclusive of Earthstone’s net debt, the companies announced Monday. Oil and natural gas company Permian Resources said that the deal boosts its exploration and production position in the Delaware basin. “We believe the acquisition of Earthstone represents a compelling value proposition for our shareholders and strengthens our position as a premier Delaware Basin independent E&P,” said Will Hickey, Co-CEO of Permian Resources, in a statement. “Earthstone’s Northern Delaware position brings high-quality acreage with core inventory that immediately competes for capital within our portfolio.” Approximately $175 million of annual synergies have been identified, according to Hickey. Permian expects the deal to deliver accretion to free cash flow per share of over 30% per year during the next two years and over 25% during the next five and ten-year periods. The Midland, Texas-based company also plans to increase its quarterly base dividend by 20% to 6 cents per share beginning with its first quarter 2024 dividend. Shares of Permian Resources fell 1.6% in premarket trades Monday, while Earthstone Energy’s stock rose 9.3%.