PDC Energy and SRC Energy announced in August 2019 a definitive merger agreement under which PDC will acquire SRC in an all-stock transaction valued at approximately $1.7 billion, including SRC’s net debt of approximately 685 million as of June 30, 2019. Under the terms of the agreement, SRC shareholders will receive a fixed exchange ratio of 0.158 PDC shares for each share of SRC common stock, representing an implied value of 3.99 per share based on the PDC closing price as of August 23, 2019. The transaction is expected to close 4Q 2019 and has been unanimously approved by each company’s board of directors.
The combined entity will have approximately 182,000 net acres in the Wattenberg field primarily located in Weld County, Colorado and 36,000 net acres in the Delaware basin. PDC expects to save $50 million annually in general and administrative expenses with a 40 million reduction in 2020 and 10 million in 2021. The company plans to operate 3 Wattenberg and 2 Delaware basin drilling rigs in 2020. PDC's board of directors will be expanded to 9 members to include 2 directors from SRC, and PDC will maintain its existing management team. The transaction closed in January 2020.