PDC Energy announced that it is acquiring SRC Energy in a deal valued at $1.7 billion, including debt.
As part of the all-stock acquisition, SRC shareholders will receive a fixed exchange ratio of 0.158 PDC shares for each share of SRC common stock, implying a value of $3.99 per SRC share based on PDC's closing common stock price on Aug. 23.
PDC will also be assuming approximately $685 million in debt, as part of the acquisition. The combined entity is expected to advantage from "complementary assets" in the Delaware Basin - a geologic basin in West Texas and southern New Mexico famous for holding large oil field deposits.
Following the deal’s closure, PDC shareholders will own about 62% of the combined company, and SRC shareholders will own around 38%.