“Diamondback To Acquire Ajax Resources For $1.2 Billion”
Diamondback Energy Inc. (NASDAQ: FANG) said Aug. 8 it will acquire Ajax Resource LLC in a cash-and-stock transaction worth roughly $1.25 billion that is set to deepen the Permian operator’s drilling inventory while further consolidating the Northern Midland Basin E&P landscape.
Ajax was formed in June 2015 with backing from New York-based private equity firm Kelso & Co. to acquire W&T Offshore Inc.’s (NYSE: WTI) Permian Basin assets known as the Yellow Rose Field. The company’s position covers about 25,493 net leasehold acres in the Northern Midland Basin with production of more than 12,100 boe/d (88% oil).
The acquisition of Ajax will add 362 net identified potential horizontal drilling locations with an average lateral length of over 9,500 ft to Diamondback’s portfolio. About 220 of those net potential locations are in the top quartile of the company’s current inventory, generating 100% or greater internal rate of returns at $60 per barrel across three zones, CEO Travis Stice said.