Centennial, Colgate Energy’s $4 Billion Betrothal a Suitable Match

Analysts consider the deal, which addresses Centennial’s inventory concerns while also sparing Colgate Energy from a potentially uphill IPO climb, as a sign of things to come in the Permian Basin.

Centennial, Colgate Energy’s $4 Billion Betrothal a Suitable Match

Gabe Daoud Jr., an analyst at Cowen, pegged Colgate Energy as a potential acquisition target for Centennial Resource Development last August, noting that Colgate’s acreage “fit like a glove.” (Source: Hart Energy, Shutterstock.com & Colgate Energy)

Centennial Resource Development Inc.’s recently announced merger with Colgate Energy—with Centennial offering a $3.9 billion dowry in cash and stock—looked to be almost inevitable.

The deal addresses Centennial’s inventory concerns, comes without overpaying and spares Colgate Energy from a potentially uphill IPO climb.

Gabe Daoud Jr., an analyst at Cowen, pegged Colgate Energy as a potential acquisition target for Centennial last August, noting that Colgate’s acreage “fit like a glove.”

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Darren Barbee

Darren Barbee is senior editor for Oil and Gas Investor magazine.