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Cimarex Energy To Acquire Resolute Energy For $1.6 Bln - Quick Facts

Cimarex Energy Co. (XEC) has agreed to acquire Resolute Energy Corp. (REN) in a cash and stock transaction valued at $35.00 per share, the two companies said Monday.

The total purchase price is about $1.6 billion, including Resolute's long term debt of $710 million, as of September 30, 2018. The transaction was unanimously approved by both companies' boards of directors.

Under the terms of the definitive merger agreement, Resolute shareholders will have the right to receive 0.3943 shares of Cimarex common stock, $35 per share in cash, or a combination of $14 per share in cash and 0.2366 share of common stock. The amount of stock and cash is subject to proration for total stock and cash mix of 60 percent and 40 percent, respectively.

The consideration represents an approximate 14.8 percent premium to Resolute's closing price of $30.49 on November 16, 2018.

Upon closing of the transaction, Cimarex shareholders will own approximately 94.4 percent of the combined company, while Resolute shareholders will own approximately 5.6 percent.

The transaction, which is expected to be completed by the end of the first quarter of 2019, is subject to the approval of Resolute shareholders. Upon closing, the Board of Directors and executive team of Cimarex will remain unchanged.

Cimarex noted that strategic and financial benefits of the acquisition include increase in the scale of key Delaware Basin asset, such that net acres in Reeves County, Texas, will increase 34 percent with the addition of 21,100 acres. Pro forma third-quarter 2018 production was over 253 MBOE/d (79,647 bo/d).

The acquisition is also expected by Cimarex to be accretive to 2019 key per-share metrics including earnings and non-GAAP cash flow.

Further, Cimarex expects the combined companies to generate free cash flow in 2020.

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