Fury Resources has signed an agreement to acquire all of the outstanding shares of common stock of Battalion Oil, a US-based upstream company, for $9.80 per share in cash, translating to a total transaction value of around $450m (C$602.26m).
Battalion Oil is focused on the liquids-rich assets in the Delaware Basin.
The transaction will see the preferred stock of Battalion Oil held by Luminus Management and funds and accounts managed by Oaktree Capital Management and their affiliates (rollover stockholders) exchanged for new preferred shares of Fury, or cash.
The rollover stockholders jointly own a 61.6% stake in Battalion Oil’s common stock.
For Q3 2023, the company’s average daily net production was 12,717 boe/d, of which 46% was oil. It’s total operating revenue during the period stood at $54.1m.
Fury Resources board executive chairman Avi Mirman said: “We are excited to announce this transaction with Battalion and believe we are well positioned to drive value growth for our investors as we return the asset to active development.
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“It has been a pleasure working with the Battalion team on this transaction, and we look forward to continuing that work as we move toward a successful close.”
Fury has secured debt commitments from Fortress Credit Corp and AI Partners Asset Management to fund a part of the merger amount.
Subject to approval by Battalion Oil’s stockholders and other conditions, the deal is due for completion in Q1 2024.
Battalion Oil CEO Matt Steele said: “It has been a pleasure working with Avi Mirman and his team to get the transaction to this point. Avi has a plan to become a premier player in the Delaware Basin.
“With the additional investment capital provided by the transaction, the company will finally be in a position to fully develop the Battalion asset base and position the company, its investors and its employees for success.”