As per the deal, EOG will issue 26.06 million shares and pay $37m in cash in exchange for Yates Petroleum, Abo Petroleum, MYCO Industries and certain other entities.
Independent crude oil and natural gas company Yates has 186,000 net acres in Delaware Basin, 138,000 net acres in Northwest Shelf and 200,000 net acres Powder River Basin.
It also has 1.1 million net acres in New Mexico, Wyoming, Colorado, Montana, North Dakota and Utah.
The deal will combine the existing large, premier, stacked-pay acreage positions of the two companies in the Delaware and Powder River basins, allowing for years of high-return drilling and production growth, EOG said.
EOG chairman and CEO William Thomas said: "We are excited by this unique opportunity to advance EOG's strategy of generating high-return growth by developing premium wells at low costs that enhance long-term shareholder value.
"Additionally we are thrilled to welcome Yates' 300 employees to the EOG family and look forward to continuing the important presence Yates has established in the community of Artesia, N.M."
EOG Resources expects the combined company to have approximately 424,000 net acres in Delaware Basin acreage, a 78% increase to its existing holdings.
Thomas added: "Through this transaction, our premium drilling strategy is gaining added momentum. With improving well productivity and this newly enhanced resource base, our organization can generate further increases in returns and capital efficiency.
"The combination enhances the size and quality of EOG's existing portfolio of oil resource plays."
Additionally, the deal is expected to increase EOG’s position in Permian Basin and adjacent plays to 574,000 net acres as well as doubles Powder River Basin position with 400,000 net acres.
Scheduled to be completed in early October 2016, the transaction is subject to customary closing conditions.
Image: EOG Resources intends to significantly expand its footprint in Permian basin in US. Photo: courtesy of suwatpo/FreeDigitalPhotos.net.
