The companies announced the transaction in a statement Tuesday.
Energen Chairman and CEO James McManus said he believes “the combination of the two companies’ quality assets, track record of execution, and peer-leading cost structures will form an even stronger, large-cap independent producer uniquely positioned to drive growth and development in the Permian Basin.”
“This transaction is the outcome of a comprehensive strategic review by Energen’s Board with the assistance of our outside advisors,” he explained further.
Energen shareholders will receive 0.6442 shares of Diamondback common stock in exchange for each share of Energen common stock, representing an implied value to each Energen shareholder of $84.95 per share based on the closing price of Diamondback common stock on August 13.
“We look forward to welcoming Energen’s employees as members of the Diamondback team, and applaud them for the hard work and dedication they have put forth to create this opportunity for the two teams to become one,” said Travis Stice, Chief Executive Officer of Diamondback.
“The synergies provided in this transaction, as well as the opportunities for capital improvements provided by increased size and scale, create a truly outstanding value proposition. The combined company’s expected production growth, capital productivity and cost structure will enhance our free cash flow profile to grow our long-term capital return program.”