HighPoint Resources (NYSE:HPR) stock is blasting off on Monday to start the trading week. And while there is no company-specific news today, Wall Street appears to be reacting to recent mergers and acquisitions (M&A) news.
Last Monday, HPR and Bonanza Creek Energy (NYSE:BCEI) announced that the two companies were merging in a deal worth about $376 million. This is a massive move for both energy firms, and will create a number of positive catalysts moving forward. That said, let’s take a look at few major points from the HPR stock announcement:
- According to the release, “Bonanza Creek will issue 9.8 million shares of common stock and up to $100 million in senior unsecured notes in the transaction.”
- The move will create a completely new company with increased business size and scale in the Denver-Julesburg (DJ) Basin of Colorado.
- In turn, this entity will own nearly 206,000 acres.
- The new company will also be able to produce 50,000 barrels of oil equivalent per day.
- Also, for fiscal year 2021, the companies expect full-year production to be between 45,000 and 50,000 barrels of oil equivalent per day.
- And Bonanza Creek “expects its combined cash costs to be between $9.00 and $10.00” per barrel of oil equivalent.
Scot Woodall, CEO and president of HighPoint Resources, had this to say about the HPR stock news:
“This transaction will create a premier DJ Basin player with a peer leading cost structure and a large, attractive rural footprint. The transaction provides HighPoint stakeholders with the opportunity to participate in a larger DJ Basin producer with both an attractive balance sheet and free cash flow profile.”
HPR stock was up more than 43% as of Monday morning.
On the date of publication, Nick Clarkson did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Nick Clarkson is a web editor at InvestorPlace.