Parsley Energy Inc. on Oct. 14 agreed to acquire its neighbor in the Delaware Basin, Jagged Peak Energy Inc., in an all-stock transaction valued at about $2.3 billion, including the assumption of debt.

The acquisition will more than double Austin, Texas-based Parsley’s position in the Delaware Basin, where the companies expect the creation of a highly contiguous, interlocking footprint will lead to a more optimized lease geometry with additional extended lateral wells and support further operational efficiencies.

As a result, the combination is expected to generate cash general and administrative savings of about $25 million in the first year and $40 million to $50 million of annual savings thereafter, according to the joint press release.

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