Plano-based Denbury Resources Inc. announced Oct. 28 it will acquire Penn Virginia Corp. in a $1.7 billion deal that will give it a core position in the Eagle Ford shale.

Denbury currently operates primarily in the Gulf Coast and Rocky Mountain regions.

“This transaction marks a defining moment for Denbury, meeting multiple strategic objectives to create a balanced, resilient, and growing business with significant scale, while reinforcing our position as the highest oil-weighted producer in our peer group,” said Chris Kendall, president and CEO of Denbury. “Penn Virginia’s Eagle Ford assets will add many years of high value, low breakeven development to our portfolio, complementing Denbury’s long-lived, high-margin assets.

“Through this combination, we plan to focus Denbury’s significant enhanced oil recovery expertise on the prolific Eagle Ford shale, positioning us at the forefront of this exciting new arena for EOR. Denbury’s passion for improved oil recovery and our deep technical knowledge give us a strong advantage on this new frontier.”

Under the terms of the definitive merger agreement, shareholders of Penn Virginia will receive, subject to proration, a combination of 12.4 shares of Denbury common stock and $25.86 of cash for each share of Penn Virginia common stock, representing consideration to each Penn Virginia shareholder of $79.80 per share based on the closing price of Denbury common stock on October 26, 2018.

The combination is expected to close in the first quarter of 2019.

Guggenheim Securities LLC acted as lead financial advisor to Denbury. J.P. Morgan Securities LLC also provided financial advice to Denbury with respect to capital structure and financial aspects of the transaction and provided a financing commitment letter for a new $1.2 billion bank revolving credit facility and a $400 million senior secured second lien bridge loan. Jefferies LLC acted as financial advisor to Penn Virginia. Vinson & Elkins LLP acted as legal counsel to Denbury. Skadden, Arps, Slate, Meagher & Flom LLP and Gibson, Dunn & Crutcher LLP acted as legal counsel to Penn Virginia.

(0) comments

Welcome to the discussion.

Keep it Clean. Please avoid obscene, vulgar, lewd, racist or sexually-oriented language.
PLEASE TURN OFF YOUR CAPS LOCK.
Don't Threaten. Threats of harming another person will not be tolerated.
Be Truthful. Don't knowingly lie about anyone or anything.
Be Nice. No racism, sexism or any sort of -ism that is degrading to another person.
Be Proactive. Use the 'Report' link on each comment to let us know of abusive posts.
Share with Us. We'd love to hear eyewitness accounts, the history behind an article.