Texas oil and natural gas producer Coterra Energy Inc. has reached agreements with two closely-held companies to buy assets in the Permian Basin for $3.95 billion.
Coterra will pay for the assets from Franklin Mountain Energy and Avant Natural Resources with $2.95 billion in cash and $1 billion in stock, according to a statement Wednesday.
The deals expand Coterra’s reach on the fast-growing New Mexico side of the top U.S. shale basin and come as U.S. oil producers jockey to buy up rivals in order to line up future drilling sites. The sales are expected to close during the first quarter of 2025.
Coterra shares rose as much as 1.2% before the start of regular trading in New York.
Franklin Mountain Energy, run by refining billionaire Paul Foster, is one of the last large closely held oil producers in the Permian.
Closely held Permian producers have become much sought after in recent years. Larger operators are seeking to expand future well inventories as production in the basin approaches its peak, expected to come sometime in the early 2030s.
Avant Natural Resources is based in Denver. It was founded by Jacob Nagy, a former managing director at the energy investment bank Petrie Partners, and Skyler Gary, who previously worked for Denver-based Hat Creek Energy LLC.
The deal will give Coterra access to 49,000 additional acres in the Permian, with potential to produce an estimated 40,000 to 50,000 bpd in 2025, according to the company.
JPMorgan Chase & Co., PNC Capital Markets LLC and TD Securities are financing the deal.
Jefferies LLC and Kirkland & Ellis LLP advised Franklin Mountain. Perella Weinberg Partners, Petrie Partners and Kirkland & Ellis advised Avant Natural Resources.