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WPX Energy Acquires Colorado´s Felix Energy in Deal Valued at USD 2.5bn
Monday 06 January 2020

6 January 2020 - Oklahoma-based energy producer WPX Energy (NYSE: WPX) has acquired Denver-based Felix Energy for USD 2.5bn, an operator in the Delaware Basin with 1,500 gross undeveloped locations in the eastern portion of the basin, the company said.
The purchase price consists of USD 900m cash and USD 1.6bn in WPX stock issued to the seller. WPX plans to fund the cash portion through issuance of USD 900m of senior notes on an opportunistic basis.
WPX also has obtained committed financing from Barclays in connection with the transaction and has full access to a USD 1.5bn revolving credit facility.
The stock consideration comprises approximately 153m WPX shares, which is based on the 10-day volume-weighted average price as of Dec. 13, 2019. The transaction is subject to customary closing conditions and approval by WPX shareholders.
WPX plans to implement a dividend post-closing, targeting approximately USD 0.10 per share on an annualised basis at initiation.
The parties anticipate closing the transaction early in the second quarter of 2020. WPX's board unanimously approved the transaction.
The acquisition is consistent with all of the tenets in WPX's five-year vision for shareholders that the company introduced in November during its third-quarter report.
On a pro forma basis, WPX expects to generate significant free cash flow in 2020 at USD 50 oil.
Following the acquisition, cash flow per share, earnings per share, free cash flow per share, return on capital employed, and cash margins are all expected to increase.
WPX also expects to continue its opportunistic share buybacks, to implement the previously mentioned dividend programme, and to reduce its leverage to 1.0x by year-end 2021.
Barclays and Tudor, Pickering, Holt and Co. acted as financial advisors to WPX on the transaction. Weil, Gotshal and Manges LLP served as legal advisor to WPX. Jefferies LLC acted as financial advisor to Felix on the transaction. Vinson and Elkins LLP served as legal advisor to Felix.
WPX Energy, Inc. is an independent energy producer with core positions in the Permian and Williston basins.
The company built its Permian Basin position through acquisitions of RKI Exploration and Production and Panther Energy, as well as grassroots leasing and the formation of a midstream joint venture with Howard Energy Partners.
Date Published: 06/01/2020
Target: Felix Energy
Country: USA
Deal Size: 2.5bn (USD)
Sector: Petroleum/Natural Gas/Coal
Type: LBO
Financing: Cash and Stock
Status: Agreed
Buyer: WPX Energy
Buyer Advisor: Barclays , Tudor, Pickering, Holt and Co , Weil, Gotshal and Manges