Midland-based Diamondback Energy said this week it agreed to purchase all leasehold interests and related assets in Midland Basin of Fort Worth-based FireBird Energy in a cash and stock transaction valued at $1.6 billion. Diamondback acquired 75,000 gross (68,000 net) highly contiguous acres for 5.86 million shares of Diamondback common stock and $775 million cash. “This bolt-on acquisition adds significant, high-quality inventory right in our backyard,” Travis Stice, chairman and CEO of Diamondback, said Tuesday. “With over 350 locations adjacent to our current Midland Basin position, this asset adds more than a decade of inventory that competes for capital right away in Diamondback’s current development plan.”
Diamondback also said Tuesday it plans to sell at least $500 million of non-core assets by yearend 2023 for debt reduction.
Estimated production at closing in 2022Q4 of FireBird assets is about 17,000 barrels of oil per day (22,000 boed). Estimated production for 2023 is 19,000 b/d of oil (25,000 boed). The assets include 353 estimated gross (316 net) horizontal locations in primary development targets (98.5 percent of acreage operated, 84 percent currently held by production). FireBird operates more than 450 vertical and horizontal wells in Midland Basin – most acquired from Chevron.