(Reuters) – Oil and gas producer Cimarex Energy Co (XEC.N) said on Monday it would buy smaller rival Resolute Energy Corp (REN.N) in a deal valued at $1.6 billion, including debt, as it seeks to expand its assets in the shale-rich Permian Basin.
Oil producers have been cementing their positions in the Permian Basin of West Texas and New Mexico, the country’s fastest growing oil field.
Earlier this year, Concho Resources Inc (CXO.N) paid $8 billion in stock, or more than $70,000 per acre, for West Texas shale rival RSP Permian, while Diamondback Energy Inc (FANG.O) agreed to buy shale rival Energen Corp (EGN.N) in an all-stock deal valued at $9.2 billion.
As part of the offer, Resolute shareholders have the option to receive 0.3943 shares of Cimarex common stock, $35 per share in cash, or a combination of $14 per share in cash and 0.2366 share of Cimarex common stock.
For the cash offer of $35 per share, the deal represents about 14.8 percent premium to Resolute’s Friday closing price of $30.49 per share.
The deal, which adds 35,000 barrels of oil equivalent per day (boe/d) to Cimarex’s production base, is expected to be completed by the end of the first quarter of 2019, Cimarex Energy said.
Shares of Resolute Energy rose 8.2 percent to $33, while those of Cimarex fell 2.5 pct to $86.55 in light premarket trading.
Reporting by Shanti S Nair in Bengaluru; Editing by Arun Koyyur