Diamondback Energy Inc. and QEP Resources have entered into a definitive agreement under which Diamondback will acquire QEP in an all-stock transaction valued at $2.2 billion, including QEP’s net debt of $1.6 billion as of Sept. 30, 2020. Consideration will consist of 0.05 shares of Diamondback common stock for each share of QEP common stock, representing an implied value to each QEP stockholder of $2.29/share based on the closing price of Diamondback common stock on Dec. 18, 2020. The transaction was unanimously approved by the board of directors of each company.
The acquisition adds material Tier 1 Midland basin inventory to Diamondback’s portfolio. QEP holds about 49,000 net acres in Midland basin. The company reported third-quarter 2020 average production of 48,300 bo/d, with average Permian basin production of 30,500 bo/d (47,600 boe/d).
Diamondback acquired 48 current drilled but uncompleted wells (DUC), which it plans to work down along with its own DUC balance in 2021. The company will divest QEP’s Williston assets pending market conditions, with potential sale proceeds used to reduce debt.
The pending QEP acquisition, together with the previously announced pending acquisition of assets from Guidon Operating LLC, will bring Diamondback’s total leasehold interests to over 276,000 net surface acres in Midland basin (429,000 Midland and Delaware basin net acres).