Coterra Expanding Permian Basin Foothold with $3.95B Acquisition

Coterra Energy will pay $3.95 billion for certain assets in the Permian Basin from Avant Natural Resources and Franklin Mountain Energy. The deal, expected to close in the first quarter of 2025, consists of $2.95 billion in cash and $1 billion of Coterra common stock, issued to one of the sellers.

The company will finance the cash portion with a mix of cash reserves and new borrowings, with JPMorgan Chase Bank, PNC Capital Markets and TD Securities providing financing.

The acquisition will increase Coterra’s holdings in the northern Delaware Basin by approximately 49,000 net acres in Lea County, NM. This will establish a new 83,000 net acre focus area within Coterra’s portfolio. The assets include 400 to 550 net Permian locations, which are targeted at multiple formations. The net locations in New Mexico will increase by approximately 75%, while those in the Permian will increase by approximately 25%.

The acquired assets are expected to produce an estimated 60,000 to 70,000 barrels of oil equivalent per day (boe/day), enhancing Coterra’s production capabilities in the region.

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

Gibson, Dunn & Crutcher LLP is serving as legal advisor to Coterra. Veriten served as independent advisor. Jefferies LLC is serving as financial advisor to Franklin Mountain Energy. Kirkland & Ellis LLP served as legal advisor to Franklin Mountain Energy. TPH&Co, the energy business of Perella Weinberg Partners, and Petrie Partners, LLC are acting as financial advisors to Avant Natural Resources. Kirkland & Ellis LLP served as legal advisor to Avant Natural Resources.