WPX Energy is taking a significant step in its commitment to delivering shareholder value with the $2.5 billion purchase of Felix Energy, one of the highest quality Delaware Basin operators.
Felix, Based in Denver, CO, has approximately 1,500 gross undeveloped locations in the eastern portion of the basin, with expected production of approximately 60 million barrels of oil equivalentd (70% oil) at the time of anticipated closing.
WPX plans to implement a dividend post-closing, targeting approximately $0.10 per share on an annualized basis at initiation.
The acquisition and dividend program follow other steps WPX took in 2019 to enhance its value proposition, including reducing net debt, executing attractive midstream monetizations, launching a share buyback program and generating free cash flow.
The purchase price consists of $900 million cash, subject to closing adjustments, and $1.6 billion in WPX stock issued to the seller. WPX plans to fund the cash portion through issuance of $900 million of senior notes on an opportunistic basis. WPX also has obtained committed financing from Barclays in connection with the transaction and has full access to a $1.5 billion revolving credit facility.
The stock consideration comprises approximately 153 million WPX shares, which is based on the 10-day volume-weighted average price as of Dec. 13, 2019. The transaction is subject to customary closing conditions and approval by WPX shareholders.
The parties anticipate closing the transaction early in the second quarter of 2020. WPX’s board unanimously approved the transaction.
Headquartered in Tulsa, Oklahoma, WPX Energy (Williams Production and Exploration) is engaged in hydrocarbon exploration with operations in the Williston Basin and the Permian Basin.
(Source and image: WPX Energy)