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Diamondback Energy, Inc. to Acquire Energen Corporation in All-Stock Transaction

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Diamondback Energy, Inc. (NASDAQ:FANG) ("Diamondback" or the "Company")
and Energen Corporation (NYSE:EGN) or ("Energen"), today announced that
they have entered into a definitive agreement under which Diamondback
will acquire Energen in an all-stock transaction valued at approximately
$9.2 billion, including Energen's net debt of $830 million as of June
30, 2018. The consideration will consist of 0.6442 shares of Diamondback
common stock for each share of Energen common stock, representing an
implied value to each Energen shareholder of $84.95 per share based on
the closing price of Diamondback common stock on August 13, 2018. The
transaction was unanimously approved by the Board of Directors of each
company.

TRANSACTION HIGHLIGHTS:

  • Creates the premier large cap Permian independent with peer-leading
    production growth, cost structure and capital efficiency
  • Over 266,000 net Tier One acres in the Permian Basin, an increase of
    57% from Diamondback's current Tier One acreage of approximately
    170,000 net acres (pro forma for previously announced Ajax acquisition)
  • Over 7,000 estimated total net horizontal Permian locations, an
    increase of over 120% from Diamondback's current estimated net
    locations (pro forma for previously announced Ajax acquisition)
  • Combined pro forma Q2 2018 production of over 222 Mboe/d (67% oil),
    third largest production for a pure play company in the Permian Basin,
    an increase of 79% from Diamondback's Q2 2018 production of 124.7
    Mboe/d (includes production from the previously announced Ajax
    acquisition)
  • 390,000 net acres across the Midland and Delaware basins, an increase
    of 85% from 211,000 net acres as of June 30, 2018 (pro forma for
    previously announced Ajax acquisition)
  • Immediately accretive in 2019 on key per-share metrics including:
    earnings per share, cash flow per share, net asset value, production
    growth per debt-adjusted share and acreage
  • Free cash flow enhancement expected to support increases in return of
    capital; Diamondback dividend to be maintained and growth in return of
    capital program to be assessed in 2019
  • Held by production nature of assets allows for development
    optimization with multi-zone, multi-well pads in both Midland and
    Delaware Basins
  • Primary deliverable synergies with net present value of $2.0 billion
    or more include:
    • Capital Productivity: Drilling, completion and equip ("D,C&E")
      well cost savings of up to $200 per lateral foot across over 2,000
      net operated locations in the Midland Basin
    • Estimated annual general and administrative ("G&A") savings of $30
      - $40 million
    • Lower cost of capital and accelerated path to investment grade
      profile
    • Primary deliverable synergies expected to be realized beginning in
      2019
  • Secondary synergies with net present value of $1.0 billion or more
    include:
    • Capital Productivity: D,C&E well cost savings of up to $50 per
      lateral foot across over 1,500 net operated locations in the
      Delaware Basin
    • Benefits of economies of scale
    • Benefit of overlapping and adjacent acreage in Howard, Martin and
      Ward counties
    • Lease operating expense reduction
    • High grading of inventory allows for cash flow acceleration and
      reinvestment
    • "Grow and prune" strategy for non-core assets with cash reinvested
      into higher return projects
    • Substantial mineral ownership and acreage with net revenue
      interest greater than 75%, providing compelling drop-down
      opportunities for Viper Energy Partners LP
    • Combination of significant midstream assets across both Midland
      and Delaware basins
    • Secondary synergies expected to be realized post integration

"This transaction represents a transformational moment for both
Diamondback and Energen shareholders as they are set to benefit from
owning the premier large cap Permian independent with industry leading
production growth, operating efficiency, margins and capital
productivity supporting an increasing capital return program. The
Energen team has done an outstanding job assembling a portfolio of Tier
One acreage in both the Midland and Delaware basins, which, when
combined with Diamondback's current portfolio, will present an extended
runway for Diamondback's record of best-in-class execution and low-cost
operations. This transaction also adds critical mass for driving capital
efficiencies in what is now truly becoming a manufacturing business. I
expect the pro forma company to be able to grow at industry leading
rates while returning capital at a competitive yield," stated Travis
Stice, Chief Executive Officer of Diamondback.

Mr. Stice continued, "We look forward to welcoming Energen's employees
as members of the Diamondback team, and applaud them for the hard work
and dedication they have put forth to create this opportunity for the
two teams to become one. The synergies provided in this transaction, as
well as the opportunities for capital improvements provided by increased
size and scale, create a truly outstanding value proposition. The
combined company's expected production growth, capital productivity and
cost structure will enhance our free cash flow profile to grow our
long-term capital return program."

James McManus, Chairman and Chief Executive Officer of Energen, stated,
"We are very pleased about this transaction and believe the combination
of the two companies' quality assets, track record of execution, and
peer-leading cost structures will form an even stronger, large-cap
independent producer uniquely positioned to drive growth and development
in the Permian Basin. This transaction is the outcome of a comprehensive
strategic review by Energen's Board with the assistance of our outside
advisors. The process examined our business plan, competitive
positioning, and strategic alternatives. We believe this all-stock
transaction with Diamondback is the best path forward for our company
and provides Energen shareholders with an excellent value for their
investment, now and in the future."

Mr. McManus added, "I also want to take this opportunity to recognize
Energen's biggest strength, our employees, and publicly thank them for
their dedication and hard work in driving Energen's success."

TRANSACTION DETAILS

Under the terms of the definitive merger agreement, shareholders of
Energen will receive 0.6442 shares of Diamondback common stock in
exchange for each share of Energen common stock, representing an implied
value to each Energen shareholder of $84.95 per share based on the
closing price of Diamondback common stock on August 13, 2018. The
consideration represents an approximately 19% premium to Energen's
closing price of $71.36 on August 13, 2018. Upon closing the
transaction, Diamondback shareholders will own approximately 62% of the
combined company, and Energen shareholders will own approximately 38%.
The resulting capital structure is consistent with Diamondback's
strategy of maintaining a conservative financial profile and will
accelerate the Company's path to an investment grade credit rating
profile.

The transaction, which is expected to be completed by the end of the
fourth quarter of 2018, is subject to the approval of both Diamondback
and Energen shareholders, the satisfaction of certain regulatory
approvals and other customary closing conditions.

Upon closing, Diamondback's Board of Directors and executive team will
remain unchanged. Additionally, the Company will continue to be
headquartered in Midland, Texas.

ADVISORS

Citigroup Global Markets, Inc. is acting as exclusive financial advisor
to Diamondback, and Akin Gump Strauss Hauer & Feld LLP is acting as
legal advisor to Diamondback. J.P. Morgan Securities LLC and Tudor,
Pickering, Holt & Co are acting as exclusive financial advisors to
Energen, and Wachtell, Lipton, Rosen & Katz is acting as legal advisor
to Energen.

CONFERENCE CALL

Diamondback will host a conference call and webcast for investors and
analysts to discuss the proposed transaction on Wednesday, August 15,
2018 at 7:30 a.m. CT. Participants should call (877) 440-7573 (United
States/Canada) or (253) 237-1144 (International) and use the
confirmation code 1539287. A telephonic replay will be available from
10:30 a.m. CT on Wednesday, August 15, 2018 through Wednesday, August
22, 2018 at 10:30 a.m. CT. To access the replay, call (855) 859-2056
(United States/Canada) or (404) 537-3406 (International) and enter
confirmation code 1539287. A live broadcast of the earnings conference
call will also be available via the internet at www.diamondbackenergy.com
under the "Investor Relations" section of the site. A replay will also
be available on the website following the call.

About Diamondback Energy, Inc.

Diamondback is an independent oil and natural gas company headquartered
in Midland, Texas focused on the acquisition, development, exploration
and exploitation of unconventional, onshore oil and natural gas reserves
in the Permian Basin in West Texas. For more information, please visit www.diamondbackenergy.com.

About Energen Corporation

Energen Corporation is an oil-focused exploration and production company
with operations in the Permian Basin in west Texas and New Mexico. For
more information, go to www.energen.com.

Important Information for Investors and Shareholders

This communication does not constitute an offer to buy or sell or the
solicitation of an offer to buy or sell any securities or a solicitation
of any vote or approval. This communication relates to a proposed
business combination between Diamondback and Energen.

In connection with the proposed transaction, Diamondback intends to file
with the Securities and Exchange Commission (the "SEC") a registration
statement on Form S-4 that will include a joint proxy statement of
Diamondback and Energen that also constitutes a prospectus of
Diamondback. Each of Diamondback and Energen also plan to file other
relevant documents with the SEC regarding the proposed transaction. No
offering of securities shall be made except by means of a prospectus
meeting the requirements of Section 10 of the U.S. Securities Act of
1933, as amended. Any definitive joint proxy statement/prospectus of for
Diamondback and/or Energen (if and when available) will be mailed to
shareholders of Diamondback and/or Energen, as applicable.

INVESTORS AND SECURITY HOLDERS OF DIAMONDBACK AND ENERGEN ARE URGED TO
READ THE REGISTRATION STATEMENT, JOINT PROXY STATEMENT/PROSPECTUS AND
OTHER DOCUMENTS THAT MAY BE FILED WITH THE SEC CAREFULLY AND IN THEIR
ENTIRETY IF AND WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION.

Investors and security holders will be able to obtain free copies of
these documents (if and when available) and other documents containing
important information about Diamondback and Energen, once such documents
are filed with the SEC through the website maintained by the SEC at http://www.sec.gov.
Copies of the documents filed with the SEC by Diamondback will be
available free of charge on Diamondback's website at http://www.diamondbackenergy.com
or by contacting Diamondback's Investor Relations Department by email at IR@Diamondbackenergy.com,
alawlis@diamondbackenergy.com,
or by phone at 432-221-7467. Copies of the documents filed with the SEC
by Energen will be available free of charge on Energen website at http://www.energen.com
or by phone at 205-326-2634.

Diamondback, Energen and certain of their respective directors and
executive officers may be deemed to be participants in the solicitation
of proxies in respect of the proposed transaction. Information about the
directors and executive officers of Energen is set forth in Energen's
proxy statement for its 2018 annual meeting of shareholders, which was
filed with the SEC on March 22, 2018. Information about the directors
and executive officers of Diamondback is set forth in its proxy
statement for its 2018 annual meeting of shareholders, which was filed
with the SEC on April 27, 2018. These documents can be obtained free of
charge from the sources indicated above.

Other information regarding the participants in the proxy solicitations
and a description of their direct and indirect interests, by security
holdings or otherwise, will be contained in the joint proxy
statement/prospectus and other relevant materials to be filed with the
SEC when such materials become available. Investors should read the
joint proxy statement/prospectus carefully when it becomes available
before making any voting or investment decisions. You may obtain free
copies of these documents from Diamondback or Energen using the sources
indicated above.

Forward Looking Statements

This news release contains forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995. All statements,
other than historical facts, that address activities that Diamondback or
Energen assumes, plans, expects, believes, intends or anticipates (and
other similar expressions) will, should or may occur in the future are
forward-looking statements. The forward-looking statements are based on
management's current beliefs, based on currently available information,
as to the outcome and timing of future events, including this proposed
transaction and the previously announced Ajax transaction. These
forward-looking statements involve certain risks and uncertainties that
could cause the results to differ materially from those expected by the
management of Diamondback or Energen. These include the expected timing
and likelihood of completion of the proposed transaction, including the
timing, receipt and terms and conditions of any required governmental
and regulatory approvals of the proposed transaction that could reduce
anticipated benefits or cause the parties to abandon the proposed
transaction, the ability to successfully integrate the businesses, the
occurrence of any event, change or other circumstances that could give
rise to the termination of the merger agreement, the possibility that
stockholders of Diamondback may not approve the issuance of new shares
of common stock in the proposed transaction or that shareholders of
Energen may not approve the merger agreement, the risk that the parties
may not be able to satisfy the conditions to the proposed transaction in
a timely manner or at all, risks related to disruption of management
time from ongoing business operations due to the proposed transaction,
the risk that any announcements relating to the proposed transaction
could have adverse effects on the market price of Diamondback's common
stock or Energen's common stock, the risk of any unexpected costs or
expenses resulting from the proposed transaction, the risk of any
litigation relating to the proposed transaction, the risk that the
proposed transaction and its announcement could have an adverse effect
on the ability of Diamondback and Energen to retain customers and retain
and hire key personnel and maintain relationships with their suppliers
and customers and on their operating results and businesses generally,
the risk the pending proposed transaction could distract management of
both entities and they will incur substantial costs, the risk that
problems may arise in successfully integrating the businesses of the
companies, which may result in the combined company not operating as
effectively and efficiently as expected, the risk that the combined
company may be unable to achieve synergies or other anticipated benefits
of the proposed transaction or it may take longer than expected to
achieve those synergies or benefits and other important factors that
could cause actual results to differ materially from those projected.
All such factors are difficult to predict and are beyond Diamondback's
or Energen's control, including those detailed in Diamondback's annual
reports on Form 10-K, quarterly reports on Form 10-Q and current reports
on Form 8-K that are available on its website at http://www.diamondbackenergy.com
and on the SEC's website at http://www.sec.gov,
and those detailed in Energen's annual reports on Form 10-K, quarterly
reports on Form 10-Q and current reports on Form 8-K that are available
on Energen's website at http://www.energen.com
and on the SEC's website at http://www.sec.gov.

All forward-looking statements are based on assumptions that Diamondback
or Energen believe to be reasonable but that may not prove to be
accurate. Any forward-looking statement speaks only as of the date on
which such statement is made, and Diamondback and Energen undertake no
obligation to correct or update any forward-looking statement, whether
as a result of new information, future events or otherwise, except as
required by applicable law. Readers are cautioned not to place undue
reliance on these forward-looking statements that speak only as of the
date hereof.

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