Fly News Breaks for August 14, 2019
Aug 14, 2019 | 08:40 EDT
Jefferies analyst Mark Lear says Diamondback Energy remains his favorite idea in Exploration & Production following the company's Q2 results. The analyst reiterates a Buy rating on the shares with a $140 price target, down from $141, citing the company's "flawless" execution, "inexpensive" valuation, "strong" debt-adjusted growth, and "accelerating" free cash flow generation.
News For FANG From the Last 2 Days
Sep 13, 2019 | 16:28 EDT
Viper Energy (VNOM), a subsidiary of Diamondback Energy (FANG) announced it has entered into a definitive purchase and sale agreement to acquire certain mineral and royalty interests from Santa Elena Minerals for approximately 5.2M common units representing limited partner interests in Viper, subject to certain adjustments. The transaction is valued at $150M and will have an effective date of October 1 with closing anticipated in Q4, subject to continued diligence and closing conditions. The transaction includes 1,358 net royalty acres across two ranches primarily in Glasscock and Martin counties; over 65% of acreage is operated by Diamondback. Acreage has a 5.6% average NRI that will provide concentrated exposure to contiguous leasehold which Diamondback plans to actively develop. Combined Q2 production of 1,400 boepd with multiple years of active development ahead on current Diamondback drilling and completion schedules; further upside provided by third-party operators not included in underwriting assumptions. Assuming no purchase price adjustments, Viper will issue common units to Santa Elena valued at $150M based on the $29.02 volume weighted average sales price of common units for the five-trading day period ended September 5, or approximately 5.2M common units. The effective date is October 1 with anticipated closing in Q4, subject to continued diligence and closing conditions. At closing, Viper will issue to Santa Elena common units as consideration for the assets, and Viper Energy Partners LLC, Viper's operating subsidiary will issue to Viper an equal number of new units of the operating company, in each case in a number equal to the quotient of $150M divided by $29.02, which represents the volume weighted average sale price as traded on Nasdaq of the common units calculated for the five-trading day period ended September 5. With respect to the common units it receives under the purchase and sale agreement, Santa Elena has agreed to waive its right to receive any distributions for which the record date falls in Q4. Santa Elena has also agreed to a restriction on transfer, sale, pledging, hedging and certain other transactions in the common units it receives in the pending acquisition, subject to certain limited exceptions, during a period beginning on the closing date of the pending acquisition and ending on the 180 day after such closing. Viper has granted to Santa Elena certain piggyback registration rights during the restricted period. The common units will be issued in reliance upon the exemption from the registration requirements of the Securities Act of 1933, as amended, provided by Section 4 of the Securities Act as sales by an issuer not involving any public offering.