NorthAmOil: Diamondback to acquire FireBird for $1.6bn

Diamondback Energy has announced a major Midland Basin acquisition, having agreed to purchase the Permian driller FireBird Energy for $1.6bn in cash and stock.
The purchase is of all leasehold interest and related assets for 5.86mn shares of Diamondback common stock and $775mn in cash.
FireBird’s assets currently consist of approximately 72,000 “highly” contiguous gross acres (291 square km) in the Midland Basin, Texas with an estimated production of some 17mn barrels per day (bpd) of oil.
The 2023 estimated average production is around 19mn bpd of oil.
The transaction is expected to close late in the fourth quarter of 2022.
“With over 350 locations adjacent to our current Midland Basin position, this asset adds more than a decade of inventory at our anticipated development pace, including inventory that competes for capital right away in Diamondback’s current development plan,” Diamondback’s chairman and CEO, Travis Stice, said. “Also, importantly, this transaction is accretive on all relevant 2023 and 2024 financial metrics, immediately increasing expected per share returns to our stockholders in the near term while also improving the long-term duration of the company’s cash return profile.”
Diamondback also announced a target to sell at least $500mn of non-core assets by the end of 2023, with proceeds earmarked for further debt reduction.
The cash portion of the FireBird transaction will be funded through a combination of cash on hand, borrowings under the company’s credit facility and/or proceeds from a senior notes offering. The cash outlay at closing is expected to be approximately $700mn.