WPX Energy to buy Felix Energy in $2.5 billion deal

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© Reuters. FILE PHOTO: A WPX Energy natural gas drilling rig in Parachute, Colorado© Reuters. FILE PHOTO: A WPX Energy natural gas drilling rig in Parachute, Colorado

(Reuters) – U.S. oil and gas producer WPX Energy Inc (N:) said on Monday it would buy privately held Felix Energy in a $2.5 billion deal, adding acreage in the Delaware Basin, which is part of the prolific Permian.

Felix’s about 1,500 gross undeveloped locations in the eastern portion of the Delaware basin are expected to produce about 60,000 barrels of oil equivalent per day, the company said.

The deal, which is expected to close early in the second quarter of 2020, consists of $900 million in cash and $1.6 billion in WPX stock.

WPX said it would add two members to its board from EnCap Investments LP, the private equity company that founded Felix.

The deal will add to earnings per share, free cash flow per share, the company said.

WPX said it has obtained committed financing from Barclays (LON:) for the deal and has access to a $1.5 billion revolving credit facility.

Barclays and Tudor, Pickering, Holt & Co are financial advisers to WPX and Weil, Gotshal & Manges LLP the legal adviser, while Jefferies LLC is the financial adviser to Felix and Vinson & Elkins LLP the legal adviser.

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