EOG Resources, Inc. (EOG), a crude oil and natural gas exploration and production company, announced Friday a definitive agreement to acquire Encino Acquisition Partners or EAP for $5.6 billion, including EAP's net debt.
Further, the EOG Board of Directors declared a dividend of $1.02 per share, 5% higher than last year, payable October 31 to stockholders of record as of October 17. The indicated annual rate is $4.08.
Under the agreement with Canada Pension Plan Investment Board or CPP and Encino Energy, EOG will buy Encino's 675,000 net core acres. The purchase significantly increases EOG's Utica position to a combined 1,100,000 net acres, representing more than two billion barrels oil equivalent of undeveloped net resource.
EOG currently expects to fund the acquisition through $3.5 billion of debt and $2.1 billion of cash on hand.
The transaction is immediately accretive to EOG's net asset value as well as all per-share financial metrics. The company added that the acquisition is accretive on an annualized basis to 2025 EBITDA by 10%, and cash flow from operations and free cash flow by 9%.
The deal is expected to close in the second half of 2025, subject to clearance under the Hart-Scott-Rodino Act and other customary closing conditions.
Ezra Yacob, Chairman and Chief Executive Officer of EOG, said, "The acquisition combines large, premier acreage positions in the Utica, creating a third foundational play for EOG alongside our Delaware Basin and Eagle Ford assets. Encino's acreage improves the quality and depth of our Utica position, expanding EOG's multi-basin portfolio to more than 12 billion barrels of oil equivalent net resource."
In the deal, Goldman Sachs & Co. LLC is serving as EOG's exclusive financial advisor, while Wachtell, Lipton, Rosen & Katz is serving as its lead legal advisor.
In pre-market activity on the NYSE, EOG shares were losing around 1.01 percent to trade at $108.77.
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