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Earthstone Energy To Buy New Mexico Assets Of Titus Oil & Gas For Around $627 Mln In Cash, Share

Earthstone Energy, Inc. (ESTE), an energy firm, said on Tuesday that it has signed a deal to buy the New Mexico assets of privately held Titus Oil & Gas Production, LLC and Titus Oil & Gas Production II, LLC and their affiliates in the northern Delaware Basin, for around $627 million in a cash and share deal.

The sum $627 million consists of $575 million in cash and around 3.9 million Class A common shares of Earthstone valued at $52 million based on a closing share price of $13.51 on June 24.

The deal is also projected to raise Earthstone's share count by only three percent, but driving major quick per share accretion.

The transaction is expected to be closed in the third quarter.

With this acquisition, the acquirer is expected to raise its net output from 18,000 to 23,000 Barrels of oil equivalent per day in the fourth quarter.

Robert Anderson, CEO of Earthstone, said: "…As we have continued to demonstrate from prior acquisitions, we believe that the price for this acquisition is highly attractive, with our ability to buy the assets at less than 2x PDP cash flows using current NYMEX strip prices. We are also obtaining six wells in progress and 86 potentially highly economic net locations which will be incorporated into our drilling plans as quickly as possible."

Titus is privately held with sponsorship by investment funds managed by NGP Energy Capital Management, LLC.

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