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PDC Acquires DJ Basin Pure-Player SRC Energy

Announced Date
August 26,2019
Deal Value $
1,700,000,000
Net Acres
86,000
Location Count
1,700
Transaction Type
Corporate
Buyer
Seller
Price Per BOE $
40,000
Source Documents:
   Source Link
   Source Link
   Source Link
Location
Region
DJ Basin

Country
United States

State
Colorado

County
Weld

Play


Production & Reserves
Production
60,800 Boe/d

Production Mix
44 % Oil

Reserves
178 MMboe (1P)


Multiples
Production ($/boe/d)
27,961

$Price/Net Acre
19,767

$1P Boe
10

$/Location
-430,588

Adj. $/acre is based on production @40,000 Boe/d

Transaction Details: 

PDC Energy Inc. and SRC Energy Inc. have entered into a definitive merger agreement under which PDC will acquire SRC in an all-stock transaction valued at approximately $1.7 billion, including SRC's net debt of approximately $685 million as of June 30, 2019.

This deal closed on January 14, 2020.

Transaction Details

  • Acreage/Land: 86,000 net
  • Production (as of 2Q19): 60.8 Mboe/d (44% oil)
  • Reserves: 178 MMBOE
  • Locations: 1700
  • Net Debt: $685 million
  • Rig Count: 2

As you can see from the map below both companies acreage is in the core of the wattenberg field and allows the proform PDC to have a much more contigious acreage.

SRC shareholders will receive a fixed exchange ratio of 0.158 PDC shares for each share of SRC common stock, representing an implied value of $3.99 per share based on the PDC closing price as of August 23, 2019. Upon closing of the transaction, PDC shareholders will own approximately 62 percent of the combined company, and SRC shareholders will own approximately 38 percent.

 

Pro Forma Assets

Materially increases PDC's scale with a consolidated, contiguous Core Wattenberg leasehold position of approximately 182,000 net acres located entirely in Weld County and pro forma second quarter 2019 total production of nearly 200,000 BOEPD (166,000 Boe per day in the Wattenberg). On a pro forma basis, the combined company is the second largest producer in the DJ basin.

Coupled with its approximate 36,000 net acre Delaware Basin position, the Company will have core assets in two of the premier U.S. onshore basins.

Preliminary 2020 Outlook

PDC's long-term strategy is to be a low-cost operator that generates and returns free cash flow to shareholders, while delivering solid production and cash flow growth on a debt-adjusted per share basis. In 2020, PDC plans to invest between $1.2 billion and $1.4 billion to operate three Wattenberg and two Delaware Basin drilling rigs.

The plan is expected to generate approximately $275 million in free cash flow assuming $55 per barrel and $2.70 per Mcf NYMEX oil and gas prices, respectively, with full-year production averaging between 200,000 and 220,000 Boe per day. Finally, PDC expects its combined G&A and LOE to be less than $5 per Boe.

 

 

DJ Basin Deal Activity In Last 12 Months



Other DJ Basin Region's Deals



Announced DateBuyerSellerDeal Value($mm)LocationCategory
Nov-09-2020 - - Click here Colorado  E&P
Jul-20-2020 - - Click here Colorado  E&P
Mar-05-2020 - - Click here Colorado  E&P
Jan-09-2020 - - Click here Texas  E&P
Dec-10-2019 - - Click here Colorado  E&P

Price History



Date Deal Headline Price$/acre
Nov-09-2020 Bonanza Creek to Acquire HighPoint Resources in $376MM Merger - -
Mar-05-2020 PE-backed Crestone Peak Acquires ConocoPhillips DJ Basin Asset - -
Dec-05-2017 Bill Barrett and PE-backed Fifth Creek Merge - -

Other SRC Energy Inc Deals



Announced DateBuyerSellerDeal Value($mm)LocationCategory
Nov-08-2017 - - Click here Colorado  E&P
Jan-12-2017 - - Click here Colorado  E&P
May-03-2016 - - Click here Colorado  E&P
May-03-2016 - - Click here Colorado  E&P
Sep-15-2015 - - Click here Colorado  E&P