Start-up firm Silver Run Acquisition II (Silver Run II) has signed agreements to merge with US-based companies Alta Mesa Holdings and Kingfisher Midstream in order to form a combined company valued at around $3.8bn.

Once the transaction is closed, Silver Run II is expected to be rechristened Alta Mesa Resources.

Alta Mesa is focused on the Stack play in Oklahoma’s Anadarko Basin with about 120,000 contiguous net acres and around 4,200 gross identified drilling locations, while Kingfisher is engaged in the gathering, processing, and marketing of hydrocarbons in the Stack play.

Silver Run II chairman and CEO James Hackett said: “The combination of Alta Mesa and Kingfisher is a perfect strategic match for our desired integrated platform. 

“Alta Mesa's highly contiguous core acreage position in north-east Kingfisher County has among the lowest breakevens in the US at around $25 per barrel. 

"The combination of Alta Mesa and Kingfisher is a perfect strategic match for our desired integrated platform."

“Kingfisher adds a highly strategic and synergistic midstream subsidiary with significant additional third party growth potential.” 

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Kingfisher will bring assets to the merged entity comprising more than 300m of pipeline, 50,000 barrels of crude storage capacity, and 60 million cubic feet a day (mmcfd) of gas processing capacity, as well as an upcoming 200mmcfd cryogenic plant expansion later this year.

Alta Mesa Resources CEO Harlan Chappelle said: "We see this as a tremendous way to continue our evolution as a low-cost, high-value producer in the Stack.”

Expected to be completed in the fourth quarter of this year, the transaction is subject to the approval of Silver Run II stockholders and the fulfilment of other closing conditions.