Penn Virginia Corporation announced it has acquired Lonestar Resources US Inc. and plans to rename the combined company Ranger Oil Corporation.
As of July 9, the all-stock deal was valued at approximately $370 million. That includes about 5.9 million shares of Penn Virginia commons stock and the assumption of approximately $236 million of Lonestar's net debt.
Penn Virginia shareholders own approximately 87% of the combined company, and Lonestar shareholders own the other 13%.
Penn Virginia intends to officially rebrand as Ranger Oil Corporation and, effective October 18, 2021, begin trading under the NASDAQ ticker symbol of ROCC. The rebranding is expected to be fully complete prior to year-end 2021. The upstream oil and gas company focuses exclusively on the Eagle Ford play in South Texas.
"In a very short time, we have significantly increased the scope and scale of the company, amplifying its free cash flow generation and return potential," said President and CEO Darrin Henke, noting that the company also added assets from Rocky Creek Resources, a jointly owned affiliate of Juniper Capital and Boomtown Oil portfolio company.
Henke said the company now has a consolidated asset position producing almost 40,000 barrels of oil equivalent per day with over 140,000 net acres strategically positioned in the core of the Eagle Ford play in South Texas. "We now own high-quality inventory approximating 750 locations, approaching two decades of inventory at our current drilling pace."
"Over the past year and a half, we have consistently committed to certain principles along with operational and financial goals designed to deliver superior returns with reduced risk," said Rusty Kelley, senior vice president and CEO.
“We’ve now achieved all of our first phase goals as Darrin set forth, and believe we now stand at the beginning of another phase of significant fundamental value creation. We believe the combination of low leverage, consistent free cash flow. increasing operational and financial efficiencies, and deep inventory provides the company with a variety of avenues for superior performance.
"We plan to continue our disciplined approach to potential consolidation opportunities while maintaining a pristine balance sheet with substantial liquidity, including our commitment to achieving a 1.0x leverage ratio in the first half of 2022. Upon achievement of our target leverage ratio, we intend to communicate and initiate our strategy around shareholder accretive uses of our robust cash flow profile," Kelley added.
Kelley continued that above all, Ranger Oil is committed to its stakeholders across its capital structure to a relentless focus on cash-on-cash returns, capital discipline, prudent risk management, continuous operational improvement and a spirit of stewardship across our operating areas and the communities where we work.
