Houston-based EOG Resources Inc. (NYSE: EOG) plans to gobble up a private energy company to expand its assets in the Permian and Powder River basins.
EOG announced Sept. 6 it plans to buy Artesia, New Mexico-based Yates Petroleum Corp. and some of its subsidiaries and other entities in an approximately $2.5 billion deal. Yates is a privately held crude oil and natural gas company that boasts about 1.6 million net acres across the western U.S.
In the deal, EOG plans to issue 26.06 million shares of common stock valued at $2.3 billion and pay $37 million in cash, per a release. EOG also plans to assume and repay $245 million of Yates’ debt, which will be offset by about $131 million of anticipated cash from Yates.
William Thomas, EOG’s chairman and CEO, said in the release that EOG is “thrilled” to bring on Yates’ 300 employees.
“Through this transaction, our premium drilling strategy is gaining added momentum. With improving well productivity and this newly enhanced resource base, our organization can generate further increases in returns and capital efficiency,” Thomas said in the release. “The combination enhances the size and quality of EOG’s existing portfolio of oil resource plays.”