Monday, September 29, 2014

Encana Buys Athlon Energy for $7.1 Billion

EnCana entered into an agreement to buy Athlon Energy for $7.1 billion (click here).

Valuation metrics for the deal:
$5.93 billion and assumption of $1.15 billion debt
100% Permian primarily in Martin, Howard, Midland and Glasscock Counties
140,000 net acres = $50,700/acre
28 mboe/d = $250k/flowing barrel

Lynden Energy has 5,883 net acres in the same counties! 
5,883 net acres x $50,700/net acre = $300 million
w/ 143.4 million fully diluted shares and discounting 20% as Lynden is not an operator, this translates to a per share price of $1.67/share US$ not including any value for Lynden's 52,000 net acres at Mitchell Ranch.

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