Austin-based Parsley Energy and Denver-based Jagged Peak Energy said Monday they have reached a merger agreement calling for Parsley to acquire Jagged Peak in an all-stock transaction valued at $2.27 billion. Parsley will own 77 percent of the combined company after closing in 2020Q1. Parsley will have about 267,000 net acres in Permian Basin, including 147,000 net acres in Midland Basin and 120,000 net acres in Delaware Basin. Jagged Peak holds 75,000 net acres targeting the southern portion of Delaware Basin in Pecos, Reeves, Ward and Winkler counties. The transaction includes Jagged Peak’s debt of $625 million.
Parsley’s announcement said, “Jagged Peak’s high-margin, oil-weighted asset base will integrate smoothly into Parsley’s near-term development program.”
Houston Chronicle reported, “The all-stock deal turns Parsley into a buyer at a time when energy analysts believed it was instead more likely for Parsley to be scooped up by a major looking to further expand in the Permian. Parsley now aims to jump up and compete with the larger Permian producers.”