News

Permian Resources Corp. Expands with $4.5 Billion Acquisition of Earthstone Energy Inc.

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4.5

Andrew R. Michaud

• August 21, 2023

A Shift in M&A Dynamics

A Strategic Boost

This exciting development not only elevates Permian Resources' standing in the industry but also signals its commitment to strategic expansion in the face of evolving market dynamics.

Permian Resources Expands Footprint in the Permian Basin

Permian Resources, a leading player in the oil and gas industry, has made a significant acquisition that will greatly enhance its position in the Permian Basin. With this deal, Permian Resources now boasts a expansive net acreage of over 400,000 acres, solidifying its foothold in this lucrative region.

Siebert Williams Shank, an equity research firm, believes that this acquisition will be highly beneficial for Permian Resources. In a recent note by Gabriele Sorbara, Managing Director of equity research at Siebert Williams Shank, it is stated that the deal is expected to be accretive across all key metrics. Furthermore, Siebert Williams Shank has raised its price target for Permian Resources to $18 from $17, reaffirming its confidence in the company and recommending a buy rating.

The Earthstone Energy deal has not gone unnoticed by industry experts either. Neal Dingmann, an analyst at Truist Securities, predicts that this acquisition could make Permian Resources an attractive target for future mergers and acquisitions. Dingmann views the deal as one that will be highly beneficial for Permian Resources in the long run, citing the agreed price, cost savings, and future operating efficiencies as key factors contributing to its success. Truist Securities has also increased its price target for Permian Resources to $18 from $16 and maintains its buy rating for the company.

The market has responded positively to this news with Permian Resources' shares ending Monday's trading session up 2.4%. Similarly, Earthstone Energy's stock ended the day with a significant 16.8% increase.

Overall, Permian Resources' strategic acquisition of Earthstone Energy positions the company for continued success in the Permian Basin. With expanded assets and operations, Permian Resources is well-positioned for future growth and potential consolidation within the industry.