Moody’s reviews Diamondback, Energen

Moody's Investors Service said it placed the ratings of Diamondback Energy, Inc. (Ba2) under review for upgrade following the announcement of a definitive agreement to acquire Energen Corp. (Ba2).

Energen's ratings were also placed under review for upgrade.

Diamondback is acquiring Energen in an all-stock transaction valued at about $9.2 billion, including Energen's net debt of $830 million as of June 30.

The consideration will consist of 0.6442 shares of Diamondback common stock for each share of Energen common stock.

“This is a transformative and positive transaction for both Diamondback and Energen that will create a large, better diversified and high-growth Permian Basin focused E&P company,” Moody’s said in a news release.

“The combined entity will have a much larger production and cash flow base to endure commodity price volatility, a deeper drilling inventory of high quality acreage that will extend portfolio durability, and greater opportunity to reduce costs, enhance capital efficiency and boost operational flexibility.”

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