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WPX Energy Picks Up Longtime Target Felix

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Published: June 22nd, 2020
The oil producer will pay $2.5 billion for the EnCap Investments portfolio company.

Oil producer WPX Energy Inc. (WPX) said Monday, Dec. 16, it has agreed to acquire competitor and longtime takeout candidate Felix Energy II from private equity firm EnCap Investments LP for $2.5 billion.

Tulsa, Okla.-based WPX Energy will pay $900 million in cash to the sellers and issue about 153 million new shares, which were worth about $1.67 billion as of Friday’s close.

While many strategics in the upstream oil and gas industry put away the checkbooks in 2019 due to investor pressure and a bleak long-term commodity outlook, WPX Energy has a history of making strategic bets of this size during dips in the cycle.

In December 2015, when oil prices were below $40 a barrel, the company tapped into the Permian Basin with the $2.35 billion purchase of RKI Exploration & Production LLC from private equity firm First Reserve Corp.

For its part, Felix II has long-been considered an attractive target. Felix II was first identified as a takeover candidate by The Deal in mid-2017 when the company represented one of the few privately held operators with a significant, contiguous acreage position in the Permian Basin.

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