The Woodlands-based Earthstone Energy said Dec. 17 it is acquiring Independent Resources Management and its Midland Basin assets. Purchase price is $185.9 million, including $135.2 million in cash (as of Nov. 30) and 12.7 million shares of Earthstone Class A common stock valued at $50.8 million (as of Dec. 16). Transaction is expected to close in 2021Q1.
Average production of the assets in 2020Q3 was 8,780 boed (66 percent oil). IRM held 4,900 core net acres in Midland and Ector counties, including 70 high-quality undeveloped horizontal locations targeting middle and lower Spraberry and Wolfcamp A. There are an additional 38,500 net acres in eastern Midland Basin.
Robert J. Anderson, president and CEO, said the deal “positions us well for additional value-enhancing transactions.” He added, “With the large majority of IRM’s production coming from its core acreage in Midland and Ector counties, the acquired assets have a very similar and complementary low operating cost, high margin profile as our existing assets….”