Cimarex Acquires Resolute Energy in $1.6B Deal
Cimarex Energy Co., a Denver-based company that primarily operates in the Permian and Mid-Continent, will acquire Resolute Energy Corporation in a cash and stock deal worth $1.6 billion, the companies announced Monday.
Cimarex entered into a definitive agreement to acquire Resolute, which includes Resolute's long-term debt of $710 million.
Resolute focuses on the acquisition and development of unconventional oil and gas properties in the Delaware Basin portion of the Permian Basin.
The acquisition will increase Cimarex’s scale of key Delaware Basin assets, adding 21,100 acres in Reeves County, Texas.
“This high-quality, bolt-on asset is tailor-made for Cimarex,” Thomas Jorden, Cimarex CEO, said in a company statement. “It is a perfect fit with our existing Reeves County position … the Resolute assets are expected to generate free cash flow in 2019, basically funding any additional development capital from the start.”
Financial firm Stifel’s analyst Michael Scialla referred to the acquisition as “positive” in a Nov. 19 note to investors.
“While [Resolute] has been shopped over the past year and some investors would have preferred an oiler acquisition or a share repurchase program, the assets fit perfectly with [Cimarex’s] Reeves County properties, the purchase price is reasonable and the transaction is a good use of the company’s large cash balance,” Scialla said.
The transaction is expected to be completed by end of 1Q 2019.
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