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Magnolia Oil agrees to buy WildFire Energy in $4.1B deal
Deal expands its presence in the Eagle Ford Shale basin of south Texas
(Magnolia Oil & Gas Corp.)
Key Takeaways:
- Magnolia Oil & Gas Corp. agreed to acquire WildFire Energy for about $4.1 billion including debt, marking the company’s largest acquisition and expanding its Eagle Ford Shale position.
- The transaction includes 32.2 million Magnolia Class A shares plus assumption of $600 million in WildFire notes, while WildFire operates more than 2,000 wells producing over 50,000 net barrels of oil equivalent daily.
- The deal is expected to close late in the third quarter, while private equity-backed energy companies continue pursuing sales amid higher crude prices and ongoing shale-sector consolidation.
Magnolia Oil & Gas Corp. agreed to acquire WildFire Energy for about $4.1 billion including debt, expanding its presence in the Eagle Ford Shale basin of south Texas.
WildFire owners will receive 32.2 million shares of Magnolia’s Class A common shares and Magnolia is assuming $600 million of outstanding notes due in 2029, according to a statement July 20.
Bloomberg News reported in June that Magnolia had emerged as the front-runner to acquire WildFire in what would be its biggest-ever acquisition.
Magnolia’s shares are up about 25% this year, giving it a market value of around $5.2 billion.
WildFire is backed by private equity firms Warburg Pincus and Kayne Anderson Capital Advisors.
The deal is expected to close late in the third quarter.
WildFire operates more than 2,000 wells with the equivalent output of more than 50,000 net barrels of oil per day, according to its website. The company is run by a management team that previously operated WildHorse Resource Development Corp. before selling to shale-gas pioneer Chesapeake Energy Corp. in 2019 for $1.9 billion.
Private equity firms are shopping several closely held oil and gas companies worth tens of billions of dollars after the Iran war pushed crude prices higher. Publicly traded companies in the U.S. shale patch have embarked on consolidation over the past few years to gain scale and lower costs as some of the top well sites get drilled up.
JP Morgan Chase & Co. and Moelis advised Magnolia while Jefferies and Bank of America advised WildFire.
