PDC Energy Announces Strategic Combination with SRC Energy in All-Stock Transaction

Two major DJ Basin producers are merging this morning with the combination of PDC Energy and SRC Energy in an all-stock transaction valued at $1.7 billion including assumption of SRC’s net debt of $685 million. The deal creates the second largest producer in the DJ Basin (behind the pro-forma numbers of the Oxy/Anadarko combination created in 2019s mega-deal and ahead of Noble) and the company will hold a total of 182,000 net acres in the DJ (entirely in Weld County, Colorado) along with PDC’s 36,000 net acres position in the Delaware Basin. “This deal looks to be right down the fairway for the consolidation needed among Small-to-Mid Cap E&Ps to help push towards strengthened financial metrics and restore investor confidence in a very challenging market,” said Enverus Senior M&A Analyst Andrew Dittmar.“ It is a low-to-no premium deal that is less about getting shareholders paid immediately via the transaction and more about building a larger, more efficient developer. The acreage positions fit like a glove in the DJ Basin, and pro-forma companies expect G&A synergies of $40 million in 2020.” “While PDC does have a position in the Delaware Basin, it didn’t quite match up with the scale of its… continue reading

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Source: CTRM Center

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