Diamondback Energy FANG recently announced that it has agreed to acquire all leasehold assets and related assets in the Permian Basin from Lario Oil & Gas in cash and stock.
Per the terms of the deal, which is anticipated to be closed on Jan 31, 2023, Lario will receive 4.18 million Diamondback shares and $850 million as cash consideration.
The acquisition includes about 25,000 gross (15,000 net) acres in the core of the Northern Midland Basin, with the full-year 2023 estimated average production of roughly 25 thousand barrels of oil equivalent per day. Moreover, FANG expects to reduce the operated rig count from two currently to one or less post-closing for 2023 development.
“Lario is an attractive bolt-on to our existing Martin County position, home to some of the best rock in the Permian Basin,” stated Travis Stice, the chairman and chief executive officer of Diamondback. He further said that the deal checks all the boxes the firm looks for in an acquisition, bringing more than 150 gross locations to the core of the Northern Midland Basin, and provides immediate accretion to all relevant financial metrics.
Founded in 2007, Diamondback Energy, Inc. is an independent oil and gas exploration & production company. The Midland, TX-headquartered firm’s primary focus is on the Permian Basin, where it has around 423,000 net acres.
Its activities are concentrated in the Wolfcamp, Spraberry and Bone Spring formations. FANG focuses on growth through a combination of acquisitions and active drilling in America's hottest and lowest-cost shale region.
Diamondback currently has a Zacks Rank #3 (Hold). Investors interested in the energy space might look at some better-ranked stocks — Patterson-UTI PTEN, Equinor EQNR and NexTier Oilfield Solutions NEX — each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
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