PDC Energy Inc. (Nasdaq: PFCE) agreed to pay about $1.5 billion for two closely held companies with a combined 57,000 acres in the Permian Basin in West Texas, the Denver-based explorer said in a statement. The driller will pay $915 million in cash and give about 9.4 million of its shares to Kimmeridge Energy Management Co., a New York-based private equity fund that manages the two companies.
Drillers including Pioneer Natural Resources Co., Parsley Energy Inc. and Concho Resources Inc. have all announced deals in the Permian this year, expanding their presence in one of the few North American oil regions where production is profitable at current prices. Until now, PDC has concentrated on wells in Colorado and Ohio, according to its statement. Dealmakers predict M&A in the energy industry will accelerate over the next 12 months, according to Mergers & Acquisitions’ Mid-Market Pulse (MMP).