Encana Corp. To Acquire Athlon Energy For About $7.1 Bln - Quick Facts

(RTTNews) - Encana Corp. (ECA, ECA.TO) and Athlon Energy Inc. (ATHL) jointly announced that both the companies have entered into a definitive merger agreement for Encana to acquire all of the issued and outstanding shares of common stock of Athlon by means of an all-cash tender offer for US$5.93 billion or US$58.50 per share, as well as Encana assuming Athlon's US$1.15 billion of senior notes, for a total transaction value of approximately US$7.1 billion.

The company said the acquisition will add Athlon's land position of about 140,000 net acres focused solely in the heart of the oil-rich Basin to Encana's portfolio, giving the company a seventh growth area.

Encana said it expects that the transaction will add current production of about 30,000 barrels of oil equivalent per day or boe/d based on Athlon's current estimated production including recent acquisitions. In 2015, Encana intends to invest at least $1 billion of capital in the play and ramp up from three to at least seven horizontal rigs by year-end 2015.

Following this oil-rich acquisition, Encana said it now expects to achieve its initial 2017 target to reach 75 percent of operating cash flow from liquids production in 2015, marking a major strategic milestone.

As per terms of the merger agreement, Athlon shareholders will receive cash consideration of US$58.50 per share, which represents a premium of 28% over the average trading price of Athlon stock for the last 20 days and a 25% premium over the trading price of Athlon stock at market close on Friday, September 26. The Offer is expected to commence within 10 business days and shareholders will have 20 business days to tender their shares to the Offer following its commencement, according to the company.