The Canadian oil and natural gas company's acquisition of Athlon would be its largest since Encana's creation in 2002. The purchase would give Encana access to 140,000 net acres in the Permian Basin and could add up to 30,000 barrels of oil equivalent per day to Encana's production capacity.
Encana will pay $58.50 a share, a 25% premium to Athlon's Friday closing price of $46.73. The Canadian company will also assume Athlon's $1.5 billion in debt.
Separately, TheStreet Ratings team rates ATHLON ENERGY INC as a "hold" with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:
"We rate ATHLON ENERGY INC (ATHL) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its solid stock price performance, robust revenue growth and good cash flow from operations. However, as a counter to these strengths, we find that the growth in the company's net income has been quite unimpressive."
- You can view the full analysis from the report here: ATHL Ratings Report