Acquisitions and Divestitures |
9 Months Ended |
|---|---|
Sep. 30, 2021 | |
| Business Combination and Asset Acquisition [Abstract] | |
| Acquisitions and Divestitures | Acquisitions and Divestitures Primexx Acquisition
On August 3, 2021, the Company entered into purchase and sale agreements with Primexx Resource Development, LLC and BPP Acquisition, LLC (collectively, the “Primexx PSAs”) to purchase, effective as of July 1, 2021, certain producing oil and gas properties, undeveloped acreage and associated infrastructure assets in the Delaware Basin for total consideration of $440.0 million in cash and 9.19 million shares of the Company’s common stock, subject to customary purchase price adjustments (the “Primexx Acquisition”). Upon signing the Primexx PSAs, the Company paid approximately $60.1 million as a deposit into third-party escrow accounts, which is classified as cash flows from investing activities in the consolidated statements of cash flows.
On October 1, 2021, the Company closed the Primexx Acquisition for an adjusted purchase price of approximately $453.7 million in cash, inclusive of the deposit paid at signing, and 8.84 million shares of the Company’s common stock for total consideration of $864.6 million, subject to post-closing adjustments. The Company funded the cash portion of the total consideration with borrowings under its Credit Facility, as defined below. Of the 8.84 million shares of the Company’s common stock issued upon closing, 2.6 million shares were held in escrow pursuant to the Primexx PSAs. Additionally, 50% of the shares held in escrow will be released six months after the closing date, and the remaining shares will be released twelve months after the closing date, in each case subject to holdback for the satisfaction of any applicable indemnification claims that may be made under the Primexx PSAs. Also, pursuant to
the Primexx PSAs, certain interest owners exercised their option to sell their interest in the properties included in the Primexx Acquisition to the Company for consideration structured similarly to the Primexx Acquisition, for an incremental purchase price totaling approximately $37.5 million, net of customary purchase price adjustments.
The Primexx Acquisition will be accounted for as a business combination. The Company has not completed its initial allocation of the purchase price to the assets acquired and liabilities assumed based on their estimated acquisition date fair values. The Company will disclose the preliminary allocation of the purchase price as well as other related disclosures in its Annual Report on Form 10-K for the year ended December 31, 2021.
Non-Core Asset Divestitures
On September 27, 2021, the Company entered into a purchase and sale agreement for the divestiture of certain non-core assets in the Eagle Ford Shale. The transaction, which is comprised of producing properties as well as an undeveloped acreage position, has an agreed upon purchase price of approximately $100.0 million, subject to customary purchase price adjustments, and is expected to close during the fourth quarter of 2021. Upon signing the purchase and sale agreement, the purchaser paid $10.0 million as a deposit into a third-party escrow account which will be applied against the purchase price to be paid upon closing. The net proceeds will be recognized in the fourth quarter of 2021 as a reduction of evaluated oil and gas properties with no gain or loss recognized.
During the second quarter of 2021, the Company completed its divestitures of certain non-core assets in the Delaware Basin for aggregate net cash proceeds of $29.6 million. The divestitures were primarily comprised of natural gas producing properties in the Western Delaware Basin as well as a small undeveloped acreage position. The net proceeds were recognized as a reduction of evaluated oil and gas properties with no gain or loss recognized.
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