02:45 PM EST, 11/13/2024 (MT Newswires) -- Coterra Energy ( CTRA ) said Wednesday it agreed to buy certain Permian Basin assets from Franklin Mountain Energy and Avant Natural Resources for $3.95 billion in a move that will boost its presence in New Mexico.

The purchase price consists of $2.95 billion in cash, as well as $1 billion of common stock issued to one of the sellers, the US oil and gas producer said without specifying that seller.

The acquisitions are expected to close in the first quarter of 2025. Neither acquisition is conditioned on the closing of the other. Franklin Mountain and Avant Natural Resources did not respond to requests seeking comment on their respective transactions.

The assets will increase Coterra's New Mexico net locations by about 75% and its Permian net locations by 25%. Shares of Coterra were up 2% in afternoon trade.

"We have been drilling horizontal wells in Lea County, New Mexico since 2010 and are extremely excited with the recent results and future opportunity across the area," Chief Executive Tom Jorden said in a statement. "The newly scaled platform provides a long runway for capital efficient development and substantial free cash flow generation."

Calling the acquisitions "highly accretive," Jorden said the deals will add significant oil volumes in 2025 and provide inventory upside to oil-weighted formations. The acquired assets include 400 to 550 net Permian locations.

Coterra Energy ( CTRA ) estimates that the acquisitions will be more than 15% accretive to estimated 2025 to 2027 per share discretionary cash flow and free cash flow and accretive to net asset value per share.

The company is estimating 2025 oil production of 150,000 to 170,000 barrels of oil per day in 2025, which would be a roughly 49% increase over the 2024 guidance midpoint.

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