Carrizo places deal at $13,000 per net acre
Houston’s Carrizo Oil & Gas, Inc. (Nasdaq: CRZO) said Tuesday it will acquire Delaware Basin properties from Devon Energy Corporation (NYSE: DVN) for $215 million in cash.
Carrizo said it will fund the purchase with net proceeds from an equity offering. The underwritten public offering of 9,500,000 shares of common stock was priced at $23.00 per share. The total gross proceeds of the offering before underwriters’ discounts and commissions will be approximately $218.5 million, Carrizo said in a statement.
Acquisition Highlights
- Approximately 10,600 gross (9,600 net) acres located in the Delaware Basin in Reeves and Ward counties
- More than 90% of net acreage operated
- 94% of the acreage is held by production
- Low average royalty of approximately 20%
- Net production of approximately 2,500 BOEPD (60% oil)
- More than 100 net potential de-risked drilling locations identified across the Wolfcamp A and B based on 7,000-ft. laterals, with significant upside potential from additional zones, further delineation, and future downspacing
- Includes salt-water disposal wells that can be integrated into the company’s system
The acquisition and increases Carrizo’s acreage position in the Delaware Basin to approximately 46,000 net acres on a pro forma basis. The deal is expected to close in Q4 2018.
“We expect to seamlessly integrate these assets into our existing development plan for the area, which currently assumes a ramp-up in activity in the second half of 2019 as Permian pipeline takeaway is forecast to increase,” Carrizo President and CEO Chip” Johnson, IV said.
