Concho to Buy Three Rivers' Permian Basin Assets for $1B

Concho Resources Inc. agreed to buy Three Rivers Operating Co.'s oil and natural gas assets for $1 billion in cash as the energy company continues to expand its holdings in the Permian Basin.

The Permian Basin in Texas has seen renewed interest from major oil companies, who are using advanced technologies to squeeze more oil out of aging fields. In December, Concho agreed to buy Petroleum Development Corp.'s remaining Permian Basin assets for about $175 million. The deal gave it about 10,800 gross acres and added more than 170 identified Wolfberry drilling locations, increasing its average working interest in the Wolfberry to 54% from 50%.

Three Rivers is a privately held exploration and production company with about 310,000 gross acres in the Permian Basin.

"Combined with our existing portfolio, these assets give the company nearly 750,000 net acres across the Permian Basin, with exposure to some of the most exciting oil plays in the U.S.," said Chairman and Chief Executive Timothy A. Leach in a release Sunday.

Concho expects to close the deal in July and said it should immediately add to earnings.

Earlier this month, the independent oil and natural gas company said its first-quarter earnings fell 27% from year-ago results that were boosted by an asset sale, while higher production and average oil prices contributed to a 41% revenue increase.