Earthstone Closes $185.9 Million Acquisition of Warburg-backed Permian Operator
Earthstone Energy completed its cash-and-stock acquisition of Independence Resources Management, a Midland Basin operator backed by Warburg Pincus, previously announced on Dec. 18.
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Earthstone Energy Inc. said Jan. 7 it had completed the acquisition of Independence Resources Management LLC (IRM), a Midland Basin operator backed by Warburg Pincus LLC.
The cash-and-stock transaction, valued at about $185.9 million, is expected to roughly double both Earthstone’s production and adjusted EBITDAX with minimal impact to leverage, said President and CEO Robert J. Anderson in a Dec. 18 release by The Woodlands, Texas-based company announcing the acquisition.
Two Natural Gas Rigs Added in U.S. Ahead of Holiday
The U.S. natural gas rig count climbed two units to 83 for the holiday-shortened week ending Wednesday (Dec. 23), while Canada saw a notable drop-off in activity ahead of the Christmas holiday, according to the latest figures from Baker Hughes Co. (BKR).
After some shuffling around in the major U.S. onshore plays, the overall domestic rig count added two units to finish at 348, including an increase of one oil-directed unit, offset by the loss of one miscellaneous unit.
The combined U.S. tally finished the week more than 450 units below the 805 rigs active at this time last year, according to the BKR numbers, which are based on data provided in part by Enverus.
Activity Picks Up in Gassy Haynesville as U.S. Rig Count Climbs
After some shuffling around in the major U.S. onshore plays, the domestic rig count added two units to finish at 348 for the holiday-shortened week ending Wednesday (Dec. 23), according to Baker Hughes Co. (BKR).
An increase of two natural gas-directed units and one oil-directed unit, partially offset by the loss of one miscellaneous unit, left the combined U.S. tally more than 450 units below the 805 rigs active at this time last year, according to the BKR numbers, which are based on data provided in part by Enverus.
Land drilling increased by one rig, while one rig returned to action in the Gulf of Mexico during the week. One directional unit and one horizontal unit were added, while vertical rigs remained unchanged week/week.
Permian Independent Earthstone Snags Midland Assets in Latest Upstream Consolidation
Permian Basin operator Earthstone Energy Inc. is increasing its scale with an agreement to acquire privately held Independence Resources Management LLC (IRM) for about $185.9 million in a cash and stock deal.
The transaction, announced on Friday and expected to close in the first quarter of 2021, consists of an estimated $135.2 million in cash and around 12.7 million in shares valued at $50.8 million. The stock value is based on a closing share price of $3.99 on Dec. 16.
“This transaction is another important step in the execution of our growth strategy to further increase our scale with high-quality accretive acquisitions,” said Earthstone CEO Robert Anderson.
Large PDP base with estimated PV-10
(3) as of 12/1/20 of approximately $173 million from 16.3 MMBoe of reserves
(4)
Approximately 4,900 core net acres (100% HBP, 93% operated) in Midland and Ector counties
Inventory of 70 high-quality undeveloped horizontal locations with an average IRR of 45% at strip pricing as of 11/30/20
Inventory targeting the Middle Spraberry, Lower Spraberry and Wolfcamp A zones
Additional potential locations in the Jo Mill, Wolfcamp B and Wolfcamp D zones
Additional 38,500 net acres (100% HBP, 100% operated) in the eastern Midland Basin
Pro forma impact on Earthstone includes:
52% increase to pro forma 3Q20 production from ~17,000 Boepd to ~25,700 Boepd
50% increase to pro forma LTM Adjusted EBITDAX as of 9/30/20 from $164 million to $246 million