CDEV - Centennial merges with privately-owned Colgate - more of the same

Centennial Resources (CDEV) and Colgate Energy Partners announced they have entered into an agreement to merge Thursday, ahead of the market open. The transaction values the combined company at $7.0b, with $3.9b in consideration for privately-owned Colgate through cash, stock, and the assumption of debt.  Founded in 2015, Colgate is a rapidly growing Delaware-basin operator. The Company currently produces ~70kboe/d, and holds 105k net acres, including 25k net royalty acres between Eddy county New Mexico and Reeves County Texas. Colgate founders Will Hickey and James Walter will serve as Co-CEOs of the new entity, while current Centennial (CDEV) CEO Sean Smith will become the Executive Chair.  Pro-forma for the transaction, Centennial (CDEV) will have a ~$4.2b market capitalization. With 145kboe/d of production by year end 2022 (135kboe/d currently), management hopes to deliver 10% production growth in 2023, and generate ~$1b of free cash flow at strip pricing. Note, both companies

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Centennial merges with privately-owned Colgate - more of the same