Independent producer Ajax Resources said Thursday it’s signed a deal with fellow independent Diamondback Energy (FANG) for the sale of Ajax’s northern Midland Basin assets for $1.24 billion in cash and stock.
The deal breakdown includes $900 million in cash and 2.58 million shares of Diamondback common stock, subject to certain closing adjustments, Kallanish Energy calculates.
The sale to Diamondback is expected to close on Oct. 31.
Assets to be acquired by Diamondback include: 25,493 net leasehold acres; current average net production of roughly 12,000 barrels of oil-equivalent per day (Boe/d) (88% oil); 367 net identified potential horizontal drilling locations with an average lateral length of over 9,500 feet; and “meaningful” saltwater disposal and fresh water access infrastructure
Upon completion, the pending Ajax acquisition will bring Diamondback’s total leasehold interests to roughly 230,000 net surface acres in the Permian Basin.
“Diamondback’s announced acquisition of high quality assets from Ajax Resources provides additional Tier 1 resource directly adjacent to our existing acreage in Northwest Martin and Northeast Andrews counties (in Texas),” said Travis Stice, Diamondback’s CEO. “We expect the transaction to close at the end of October 2018, with interim Ajax development focused on large multi-well, multi-zone pad development to be assumed by Diamondback in November.”
Jefferies acted as sole financial advisor to Ajax and Thompson & Knight served as legal advisor to the buyer.