PDCE Energy +6% on "transformative" Delaware Basin deal

|About: PDC Energy, Inc. (PDCE)|By:, SA News Editor

PDC Energy (PDCE +5.9%) jumps to two-year highs following its entry into the Delaware Basin with the acquisition of ~57K net acres for $1.5B.

Canaccord analysts reiterate their Buy rating and $72 stock price target, as they continue to believe the Delaware Basin will be the focus of transaction activity going forward even as the Midland Basin has stolen the show with purchases in recent weeks; the firm says the fact that the Delaware continues to boast several sizable P-E-backed operators means that logical takeout targets remain for future M&A.

Stifel says that like most Permian Basin transactions, the deal was not cheap, working out to $22K/acre vs. $27K/acre for last month's nearby acquisition by Diamondback Energy, $15K/acre for a January purchase by Concho Resources, and $13K/acre for a deal last November by EOG Resources.

Stephens upgrades shares to Overweight and KeyBanc raises its PDCE price target to $76 from $72 because of the "transformative" deal.

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