Permian Basin operators Independence Energy of Houston and Contango Oil & Gas of Fort Worth said Tuesday they have agreed to merge in an all-stock transaction to create a diversified, low-leverage independent oil and gas company with low-decline producing properties and low-risk growth opportunities. Value of the new entity is $5.7 billion with net debt of $935 million. Independence shareholders will own 76 percent and Contango 24 percent of the as-yet-unnamed company to be based in Houston.
Independence, which is managed by global investment firm KKR, operates in Permian, Eagle Ford, Rockies and Mid-Continent, and Contango has assets primarily in Permian, Rockies and Mid-Continent. Estimated production for 2022 is 108,000 to 114,000 boed. Closing is expected in late 3Q or early 4Q.