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Jagged Peak To Be Acquired By Parsley Energy In $1.62 Billion Deal

Parsley Energy, a US-based oil and natural gas company, announced its plan to take over Jagged Peak Energy, its minor rival. Reportedly, with the finalization of this all-stock agreement worth $1.62 Billion, there will be acreage addition in an oil-rich part of the top-most U.S. shale basin. With this announcement, there was a drop of 11% to $15.14 in the shares of Parsley Energy, which was earlier considered as a takeover target. At present, instead of getting the growth opportunities due to the explosive oil prices in the sector, the company is caught in a situation where it is facing pressure from its shareholders to get the higher returns.

On the other hand, relative to the offer price of $7.59 a share, there was a drop of 2.6% to $6.64 in the shares of Jagged Peak. With Callon Petroleum’s announcement regarding the Carrizo acquisition, its shares were dropped approximately 15% on July 15. And in September 2019, Callon was urged by the billionaire investor John Paulson’s hedge fund to cancel the anticipated $1.2 Billion takeover and instead of that consider selling itself.

The statement from Neal Dingmann, Analyst from SunTrust Robinson, highlights that though the latest Parsley–Jagged Peak agreement is totally upbeat, the present concerns from the shareholders regarding this agreement along with uncertainties over the timing of the firm’s free cash flow might put pressure on the shares of Parsley. In recent times, in an attempt to minimize some distress, Parsley stated that it anticipates the “low-premium” agreement to immediately add to 2020 cash flow per share. Moreover, to back the potential improved capital return, the growth in the free cash flow is anticipated by the firm.

On a similar note, recently ExxonMobil and Indian Oil Corporation stated that they have finalized a preliminary deal in which the latest models of offering low-cost natural gas will be explored by both the entities. Bill Davis, Lead Country Manager, South Asia, ExxonMobil, stated, “What actually matters is how we speed up India’s access to cleaner, affordable energy.”

Ivan Martinez
Ivan Martinez Subscriber
Managing Editor At Market Research 24

Ivan accomplished the Degree of Bachelors in Management Information Systems. Earlier, he was working as a Business Analyst. However, his zeal to connect with people and share the knowledge pushed him into the field of writing. Lately, Market Research 24 Business section team celebrated Ivan’s successful 5 years with our news portal. As the Head of the Business Department, he shows active involvement in the quality check of every news report created by his team. At the same time, he never fails to show his superlative proofreading and editing skills along with the precise presentation abilities while writing news for the Market Research 24 platform.

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