Crescent Energy to Buy SilverBow Resources for $2.1B
Crescent Energy has agreed to buy rival SilverBow Resources, a Houston-based energy company, in a $2.1 billion transaction to become the second-largest operator in the Eagle Ford shale formation in south Texas, as M&A activity in the US oil and gas industry continues to ramp up.
SilverBow shareholders will receive 3.125 shares of Crescent common stock for each share of SilverBow common stock, with the option to receive all or a portion of the proceeds in cash at $38 per share, up to a maximum $400 million, the companies said.
Crescent shareholders will own between approximately 69% and 79% while SilverBow shareholders will own between approximately 21% and 31% of the combined company.
The transaction will “create a scaled company with a balanced portfolio of high-quality and long-life assets,” the firms said.
“This combination creates a leading mid-cap company with significant value creation potential and the stability of a large-cap operator,” Crescent CEO David Rockecharlie said.
The Energy Information Administration said earlier this year that U.S. oil and gas exploration and production companies spent up to $234 billion on M&A last year, the highest real dollar spend since 2012.
This year also began on an upward trajectory, as companies announced a record $51 billion in deals in the first quarter, led again by dealmaking in the Permian, according to Enverus Intelligence Research .
The acquisition comes as SilverBow’s largest shareholder, Kimmeridge Energy Management, has been pressing for changes to the company’s board.
The transaction is expected to close by the end of the third quarter of this year.