SilverBow Resources to be acquired for $2.1 billion

SilverBow Resources, a Houston-based E&P company, has agreed to be acquired by Crescent Energy, also based in Houston, for $2.1 billion. Combined, they will have the second largest production in the Eagle Ford Basin, behind EOG.



SilverBow, has been trying to fight off a takeover by its largest shareholder, Kimmeridge Energy Management. Kimmeridge had effectively offered $34 a share, whereas Crescent’s offer is $38 a share.

SilverBow was formerly known as Swift Energy, which filed for bankruptcy in December 2015. After the company emerged from bankruptcy in April 2016, it changed its name to SilverBow and went public the following year.  The company has taken on a lot of debt as it embarked on an aggressive acquisition and capex program. That attracted the ire of Kimmeridge.

Crescent was formed in December 2021 from the merger of Contango Oil, a publicly-traded company and Independence Energy, a private company. Crescent is controlled by KKR, a large investment firm.

The transaction is structured as an all-stock transaction, though SilverBow shareholders can elect $38 per share cash alternative (up to a maximum total cash consideration of $400 million). Crescent shareholders will own between 69% and 79% of the combined company. The current management of Crescent will run the combined company, which will also retain the Crescent name.

Crescent expects to generate between $65 million and $100 million in cost savings, through cost of capital advantages and elimination of overheads. The companies have many adjacent properties in the Eagle Ford which should also drive savings.

 

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