Diamondback to buy shale rival QEP Resources for $555-million

Diamondback to buy shale rival QEP Resources for $555-million

U.S. shale producer Diamondback Energy (FANG-Q) said on Monday it would buy rival QEP Resources Inc. (QEP-N) for $555.2 million in an all-stock deal, the latest merger in an industry trying to recover from a pandemic-induced downturn.

Shale drillers have started to rapidly consolidate to survive lower oil production after COVID-19 lockdowns slashed global demand for oil through much of this year.

Pioneer Natural Resources Co. (PXD-N) in October said it would buy smaller rival Parsley Energy Inc, while Devon Energy in September said it would acquire WPX Energy in an all-stock, low premium deal.

Diamondback said QEP’s shareholders would get 0.05 of a Diamondback share for each QEP share they own, implying a per share value of $2.29, a small discount to QEP’s Friday close on the NYSE.

Including about $1.6 billion of QEP’s debt, the transaction is valued at $2.2-billion.

Separately, Diamondback said on Monday it would buy lease interests and assets in the Midland Basin from a privately held company Guidon Operating Llc for over $850 million in cash and stock.

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Published at Mon, 21 Dec 2020 12:48:47 +0000