Centennial Resource Development and Colgate Energy Partners III have entered into a merger agreement that would create the largest pure-play E&P company in the Delaware Basin.
The combined company would have about 180,000 net-leasehold acres, 40,000 net-royalty acres and total production of 135,000 Boe/d.
The $7 billion merger of equals values Colgate at approximately $3.9 billion and is composed of 269.3 million shares of Centennial stock, $525 million of cash and the assumption of $1.4 billion of Colgate’s outstanding net debt.
The cash consideration and the repayment of Colgate’s outstanding credit-facility borrowings at closing are expected to be funded with cash on hand and borrowings under an upsized revolving-credit facility.
“This transformative combination significantly increases scale and drives accretion across all our key financial and operating metrics,” said Sean Smith, CEO of Centennial. “Colgate’s complementary, high-margin