Diamondback Energy to acquire Midland Basin operator Lario Permian
Diamondback Energy, a US oil and natural gas company, has signed a definitive purchase agreement to acquire all leasehold interest and associated assets of Lario Permian, a Midland Basin operator owned by Lario Oil & Gas Company, in a cash and stock transaction valued at $1.5 billion.
The value of the transaction includes $850 million of cash and 4.18 million shares of Diamondback Energy’s shares.
Through the deal, Diamondback Energy will gain nearly 15,000 net acres in the core of the Northern Midland Basin. For the full-year 2023, the projected average production of the acreage will be approximately 18,000 barrels of crude per day.
Diamondback Energy anticipates minimizing the operated rig count from two, which is currently the number, to one or less after closing the deal for 2023 development.
Diamondback Energy is expected to fund the cash portion of the deal through a combination of cash on hand, borrowings under the Company’s credit facility and/or proceeds from a senior note offering.
Last month, Diamondback Energy announced it would acquire all leasehold interest and associated assets of privately-held FireBird Energy in a stock and cash deal valued at approximately $1.6 billion.
Travis Stice — Diamondback Energy Chairman and CEO said: “Lario is an attractive bolt-on to our existing Martin County position, home to some of the best rock in the Permian Basin.
“This is a deal that checks all the boxes Diamondback looks for in an acquisition, as it brings over 150 gross locations in the core of the Northern Midland Basin and also provides immediate accretion to all relevant financial metrics, enhancing Diamondback’s overall value proposition to our stockholders.
“When combined with our pending FireBird acquisition, we will grow our Midland Basin footprint by approximately 83,000 net acres, add 500 high quality drilling opportunities that compete for capital with our current development plan and increase our 2023 production profile by approximately 37 MBo/d (50 MBoe/d).”
The transaction is scheduled to close on 31 January 2023, subject to customary closing conditions and adjustments.