Oil and natural gas company WildHorse Resource Development Corp. (NYSE:WRD) recently struck a $625 million deal with The Woodlands, TX-based upstream operator Anadarko Petroleum Corp. (NYSE:APC) and subsidiaries of private equity giant KKR & Co. L.P. (NYSE:KKR) to purchase 111,000 net acres in the Eagle Ford Shale in South Texas and related production. The transaction is expected to be completed by the end of June.
Benefits of the Deal
The cash and stock transaction will enhance WildHorse’s asset base, adding 949 net locations along with 22.9 million barrels of oil equivalent (MMBOE) developed reserves. Should the deal go through, WildHorse will own 385,000 net acres, making the company the second-largest operator in Eagle Ford Shale. The company also mentioned that the acquired properties have produced 7,583 barrels of oil equivalent per day from 386 operated wells in the last quarter of 2016.
Transaction Details
Per the terms of the deal, WildHorse will pay Anadarko and KKR $556 million and $69 million, respectively. While Anadarko will receive cash, the payment to KKR will be made through 6.3 million shares of common stocks. In order to fund the acquisition, The Carlyle Group LP (NASDAQ:CG) will buy $435 million of WidHorse’s convertible preferred stock.
About the Company
WildHorse Resource Development is involved in the acquisition, exploration, development and production of oil, natural gas and NGL. The company properties primarily consist of Eagle Ford Shale in East Texas and the Cotton Valley in North Louisiana. The company is based in Houston, TX. It currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
Price Performance
WildHorse, which falls under the Zacks categorized Oil and Gas - United States - Exploration And Production industry, has seen its shares lost 1.84% over the last one month, compared with the broader industry’s decrease of 4.22%.
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KKR & Co. L.P. (KKR): Free Stock Analysis Report
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