SeekingAlpha: FANG Buys QEP -- December 21, 2020

From SeekingAlpha:

• Diamondback Energy agrees to acquire QEP Resources  in an all-stock deal valued at ~$2.2B, including QEP's $1.6B net debt as of Sept. 30.
• Consideration will consist of 0.05 shares of Diamondback common stock for each QEP shares, representing an implied value to each QEP stockholder of $2.29/share based on Friday's closing price.
• Crude oil futures  are down 4% amid the risk off tone in worldwide markets.
• Diamondback says the deal is accretive on all relevant 2021 per share metrics including cash flow per share, free cash flow per share and leverage, before accounting for synergies, which it anticipates will total $60M-$80M/year.
• QEP's Q3 average production was 48.3K bbl/day, including 30.5K bbl/day in the Permian Basin.
• Diamondback says it also agrees to acquire all leasehold interests and related assets of Guidon Operating LLC for 10.63M shares and $375M of cash.
• Diamondback says the pending QEP acquisition, combined with the previously announced pending purchase of assets from Guidon Operating, will bring its total leasehold interests in the Midland Basin to 276K net surface acres.
• Other E&P stocks that could see elevated volatility as a result of the deal include Callon Petroleum, Centennial Resource Development.
• "Diamondback has the balance sheet and the low costs to begin recovering to normal operating levels in the current environment," Long Player writes in a bullish analysis posted recently on Seeking Alpha;
  

From The WSJ: Diamondback buys QEP, described as a "west Texas shale driller." 

Travis Stice, Diamondback’s chief executive, said the company would shift spending to regions near assets in the northern Midland basin, part of the Permian. It considers QEP’s position in the Bakken Shale of North Dakota to be a “noncore” asset that may be sold.

From Bloomberg via Twitter:

Javier Blas is the chief energy correspondent at Bloomberg News, co-aurthor of the forthoming ooks, The World For Sale.