Coterra Energy in $3.95bn Permian acquisition

Houston-based Coterra Energy said November 13 it had entered into two separate agreements to acquire certain Permian Basin assets from Franklin Mountain Energy and Avant Natural Resources and its affiliates for an aggregate consideration of $3.95bn.

The purchase price consists of $2.95bn cash and $1bn of Coterra common shares, issued to one of the sellers. The cash portion is expected to be funded through a combination of cash on hand and borrowings.

“These highly accretive acquisitions create an expanded core area in New Mexico that plays to Coterra’s organisational strengths,” Coterra CEO Tom Jordan said. “In addition to adding significant oil volumes in 2025, the acquired assets provide inventory upside to established and emerging oil-weighted formations.”

The acquisition includes about 49,000 net acres in the northern Delaware Basin portion of the Permian with an estimated 400-550 net Permian locations.

Coterra expects to spend $400-$500mn on the acquired assets in 2025, adding 40,000-50,000 barrels/day of oil production and 60,000-70,000 barrels of oil equivalent (boe)/day of combined oil and natural gas production.

Both acquisitions are subject to customary closing conditions and are expected to close in Q1 2025 with an effective date of October 1, 2024.