Athlon Energy Inc.NYSE
Sep. 29, 2014, 12:26 PM
- Encana’s (ECA +2.3%) takeover of Athlon Energy (ATHL +24.6%) is good news for Diamondback Energy (FANG +2.3%) and Energen (EGN +2.2%), according to analysts at Sterne Agee.
- The acquisition implies a value of $98/share for FANG, Sterne says, based on FANG's 85K net acre leasehold position, estimated 19.8K boe/day of Q3 production, $585M of assumed debt, and a $1.7B market value for the Viper Energy Partners (NASDAQ:VNOM) units it owns.
- The firm sees even more upside for EGN, as ECA’s price implies a value of $102/share for EGN, based on 180K net acres across both sides of the Permian Basin, 48K boe/day of Q3 Permian Basin production, 132M cfe/day of Q3 San Juan Basin, and $835M of pro forma net debt as of Sept. 30.
- Permian producers Laredo Petroleum (LPI +5%), Parsley Energy (PE +5%) and RSP Permian (RSPP +4.8%) also are higher following the acquisition news.
Sep. 29, 2014, 7:27 AM
- Encana (NYSE:ECA) agrees to acquire Athlon Energy (NYSE:ATHL) for $58.50/share in cash plus assumption of $1.15B of senior debt, bringing the total transaction value to ~$7.1B.
- The deal gives the no. 2 Canadian gas producer a large stake in Texas' oil-rich Midland Basin.
- ECA says the deal adds 140K net acres of land and production of ~30K boe/day, and that it will spend $1B next year to boost drilling in the new play.
- ATHL +24.3% premarket.