Colgate Energy agreed on May 19 to combine with Centennial Resource Development Inc., squashing recent rumors that Colgate was seeking an IPO.

The $7 billion “merger of equals transaction” will create the largest pure-play E&P company in the Delaware Basin of the Permian with approximately 180,000 net leasehold acres and 135,000 boe/d of current production.

“This transformative combination significantly increases scale and drives accretion across all our key financial and operating metrics. Colgate’s complementary, high-margin assets are a natural fit for Centennial, creating the largest pure-play E&P company in the Delaware Basin,” Centennial CEO Sean Smith commented in a joint company release.

“Importantly,” Smith added, “the combined company is expected to provide shareholders with an accelerated capital return program through a fixed dividend coupled with a share repurchase plan.” by Emily Patsy, Hart Energy

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