Tulsa’s Vital Energy is being acquired by Houston shale producer Crescent Energy in a $3.1 billion all-stock deal.
The merger is expected to close by the end of the year and would add operations across the Eagle Ford and Permian Basins and the Uinta Basin in Utah with one of the nation’s largest independent oil and gas producers. It will also create a top 10 independent oil and gas producer in the U.S.
“Today’s announcement recognizes the value we have created at Vital Energy. Our combination with Crescent Energy will create a premier, scaled, mid-cap operator with significant efficiencies across a larger asset base,” said Vital CEO Jason Pigott.
“ The combined businesses will have more capital allocation flexibility across a vast development inventory and the ability to immediately transfer best operating practices across basins. Strong free cash flow generation will maintain a premier balance sheet and drive sustainable capital returns to shareholders. We are confident that this deal is the right move for Vital shareholders, and it recognizes the hard work and dedication of all Vital employees over the last six years.”
“This transaction is transformative for Crescent and consistent with our strategy,” said John Goff, Crescent’s Chairman of the Board. “Crescent’s impressive trajectory of returns-driven growth through M&A has cemented the company as a top ten independent, with line of sight to an investment grade credit rating. Acquiring Vital and executing on an attractive pipeline of non-core divestitures sharpens our focus and expands our opportunity set for accretive future growth.”
Crescent CEO David Rockecharlie said, “This combination represents compelling value for all shareholders, with attractive acquisition returns and significant accretion across all key financial metrics. We’ve always had a free cash flow focused strategy, and our model applied to these assets creates sustainable value for all shareholders. With this acquisition and our $1 billion non-core divestiture pipeline, we are better positioned than ever before. Crescent will have more focus, more scale and more potential to deliver long-term value to shareholders.”
The agreement was made on Sunday, August 24, according to Monday’s announcement. Under the merger, shareholders in Vital will receive 1.9062 Crescent shares for each share, a move that represents a 15% premium to Vital’s 30-day average price as of August 22. Board of both companies approved the deal.
It’s reported that Crescent anticipates nearly $100 million in annual savings and plans to sell $1 billion in non-core assets.
