Ajax Resources Announces Execution of Definitive Agreement to Sell Midland Basin Assets to Diamondback Energy

Source Press Release
Company Ajax Resources, LLCDiamondback Energy Inc. 
Tags Asset Deals, Deals, Tight Gas & Liquids, Shale Oil, Shale Gas, Wolf Camp, Unconventional Resources, Upstream Activities
Date August 09, 2018

On July 22, 2018, Ajax Resources, LLC (“Ajax”) entered into a purchase and sale agreement with Diamondback Energy, Inc. (NASDAQ “FANG”) for the sale of its northern Midland Basin assets for $900 million in cash and 2.58 million shares of Diamondback common stock, subject to certain closing adjustments. Execution of the PSA comes less than three years after acquiring the Yellow Rose field from W&T Offshore. The sale to Diamondback is expected to close on October 31, 2018, and includes:

  • 25,493 net leasehold acres
  • Current average net production of ~12,000 boe/d (88% oil)
  • 367 net identified potential horizontal drilling locations with an average lateral length of over 9,500 feet
  • Meaningful saltwater disposal and fresh water access infrastructure

Rich Little, Ajax CEO commented: “This transaction represents a logical transition for the Ajax asset base, as it complements Diamondback’s acreage position very well and further consolidates the Northern Midland Basin. With the strong sponsorship and support of our private equity partner, Kelso, we were able to deploy the necessary resources and capital to delineate and strategically develop an underexploited asset base. We look forward to partnering with Kelso again on our next acquisition opportunity.”

Forrest Wylie, Executive Chairman of Ajax, noted: “Ajax Resources acquired the asset in 2015 at a time when our acreage was viewed by the industry as the northernmost edge of the basin and only the Lower Spraberry was considered prospective. I am proud of Ajax’s ability to prove up and execute on a very successful multi-zone program delivering repeatable, highly economic well results that compete favorably anywhere in the basin.”

Frank Loverro, Kelso co-CEO added: “I would like to thank our exceptional management team and staff. Their strategic vision and operational execution delivered outstanding returns for all shareholders.”

Advisors

Jefferies LLC acted as sole financial advisor to Ajax and Thompson & Knight LLP served as legal advisor to Ajax.

Source: EvaluateEnergy® ©2019 EvaluateEnergy Ltd