Denver’s QEP Resources Inc. is wrapping up 2020 with plans to be acquired by Texas-based Diamondback Energy Inc. in a $2.2 billion deal including $1.6 billion in debt.
The two firms are West Texas rivals and Diamondback recently announced it was also acquiring leasehold interests and other assets from a private company, Guidon Operating LLC in a separate cash-and-stock deal worth $860 million.
For Diamondback, it means an additional 81,500 net acres to its drilling region in the Permian Basin in West Texas and New Mexico. The acquisition brings Diamondback’s total holdings at 429,000 net acres.
The consideration will consist of 0.05 shares of Diamondback common stock for each share of QEP common stock, representing an implied value to each QEP stockholder of $2.29 per share based on the closing price of Diamondback common stock on December 18, 2020. The transaction was unanimously approved by the Board of Directors of each company.
“The acquisition of QEP also checks every box of Diamondback’s corporate development strategy,” stated Travis Stice, Chief Executive Officer of Diamondback.
He said as a result of the acquisition, his company will be able to allocate most of its capital to the high-returning Midland Basin.
The acquisition was also met with a positive response at QEP.
“We believe that this strategic merger with Diamondback, along with the addition of the Guidon assets, provides our shareholders with an exciting investment opportunity, now and in the future.,” said Tim Cutt, President and Chief Executive Officer of QEP.
Source: QEP
