EOG Resources (EOG) To Acquire Encino Acquisition Partners (EAP)

EOG Resources, Inc. (NYSE:EOG) is one of the 10 Best Value Stocks to Buy According to Billionaires. The company announced a definitive agreement with Canada Pension Plan Investment Board (CPP) and Encino Energy, according to which EOG Resources, Inc. (NYSE:EOG) will acquire Encino Acquisition Partners (EAP) for the consideration of $5.6 billion, including EAP’s net debt. The company currently expects to finance the acquisition via $3.5 billion of debt and $2.1 billion of cash on hand.

EOG Resources (EOG) To Acquire Encino Acquisition Partners (EAP)

An oil rig in action in a vast desert, drilling for natural gas.

EOG Resources, Inc. (NYSE:EOG)’s management highlighted that the acquisition tends to combine large, premier acreage positions in the Utica, thereby creating a third foundational play for EOG along with its Delaware Basin and Eagle Ford assets. Notably, Encino’s acreage improves the quality and depth of EOG Resources, Inc. (NYSE:EOG)’s Utica position, resulting in the expansion of its multi-basin portfolio to over 12 billion barrels of oil equivalent net resource.

The transaction is immediately accretive to EOG Resources, Inc. (NYSE:EOG)’s net asset value and all per-share financial metrics. To be specific, the acquisition will be accretive on an annualized basis to 2025 EBITDA by 10%, and cash flow from operations and FCF by 9%.

While we acknowledge the potential of EOG to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than EOG and that has 100x upside potential, check out our report about this cheapest AI stock.

READ NEXT: 13 Cheap AI Stocks to Buy According to Analysts and 11 Unstoppable Growth Stocks to Invest in Now

Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.