PDC Energy To Buy Two Privately Held Companies For About $1.5 Bln

(RTTNews) - PDC Energy Inc. (PDCE) said that it has entered into definitive agreements to acquire two privately held companies managed by Kimmeridge Energy Management Company for approximately $1.5 billion, subject to due diligence and certain customary closing conditions.

The privately negotiated transaction includes approximately 57,000 net acres in Reeves and Culberson Counties, Texas with an average working interest of approximately 93 percent. Current net production is approximately 7,000 barrels of oil equivalent per day or "Boe/d" from 21 horizontal wells, with two additional wells in the completion and flowback phase. The transaction is expected to close in the fourth quarter of 2016.

Consideration in the transaction includes approximately $915 million of cash and approximately 9.4 million shares of PDC Energy common stock privately placed to the sellers and valued at approximately $590 million.

The company intends to fund the cash portion of the acquisition through potential equity and debt financings prior to closing. Through committed financing from J.P. Morgan, the Company has secured incremental liquidity, bringing its current liquidity to approximately $1.4 billion.