Range Resources Corp., Ft. Worth, has agreed to acquire Memorial Resource Development Corp. (MRD), Houston, in an all-stock deal valued at $4.4 billion, including the assumption of MRD’s net debt of $1.1 billion as of Mar. 31.
MRD’s assets are concentrated in North Louisiana, where the firm recorded first-quarter natural gas production of 420 MMcfd from 561 gross producing wells. The 241,130 gross acres—219,654 net—have proved reserves of 1,378 bcf of gas equivalent and 4,132 gross horizontal locations. MRD currently has 105 horizontal wells producing from its four primary zones in Terryville field in Lincoln Parish, La.
Range’s operations are focused in stacked-pay projects in the Appalachian basin. “This acquisition will give Range strategic positioning in both the Appalachian and Gulf Coast regions, providing greater marketing capabilities and opportunities, with added beneficial exposure to growing natural gas demand,” explained Jeff Ventura, Range Resources chief executive officer.
Jay Graham, MRD’s chief executive officer, said, “This transaction combines two complementary companies with a deep, stacked pay portfolio of assets in two leading unconventional resource basins.”
As part of the deal, MRD shareholders will receive 0.375 of a share of Range common stock for each share of MRD common stock held. Based on the Range closing price on May 13, the deal has an implied value to MRD shareholders of $15.75/share, representing a 17% premium to the closing price of MRD stock. Following completion, shareholders of MRD are expected to own 31% of the outstanding shares of Range.
The boards of both companies have unanimously approved the terms of the agreement, and have recommended that both shareholder groups approve the deal, which is expected to close in the second half.