Denbury, Penn Virginia Terminate $1.7B Merger
Denbury Resources Inc. and Penn Virginia Corp. have mutually agreed to terminate their previously announced agreement under which Denbury was to acquire Penn Virginia for $1.7 billion.
The deal would have given Denbury, which operates in the Gulf Coast and Rocky Mountain regions, a new core position in the Eagle Ford.
Denbury’s CEO Chris Kendall cited “difficult market conditions” and “opposition of certain Penn Virginia shareholders” as reasons the transaction wasn’t expected to garner majority approval.
“We remain optimistic about the significant resource potential that CO2 enhanced oil recovery could deliver in the Eagle Ford, and the work we have completed to date has only increased that optimism,” said Kendall.
He added, “As we move forward, we are highly confident in Denbury’s position and are committed to executing our strategic plan, including the significant ongoing EOR development at the Cedar Creek Anticline … we will maintain our disciplined operating approach, which we expect will enable us to generate well over $100 million of free cash flow in 2019 at current oil prices, providing us with significant flexibility going forward.”
Penn Virginia’s CEO John Brooks said his company would remain focused on developing assets and maximizing shareholder value as a standalone company.
Under the terms of the merger agreement and the termination agreement, Denbury nor Penn Virginia will be responsible for any payments to the other party as a result of the termination.
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