Earthstone Energy Inc.’s subsidiary Earthstone Energy Holdings LLC is making a private offering of $500 million in senior unsecured notes to help fund the purchase of Novo Oil & Gas Holdings announced on June 15.

The Woodlands, Texas-based E&P’s $1 billion deal to acquire Novo is expected to close in the third quarter and will add approximately 56,000 net acres to Earthstone’s position in the Delaware Basin.

Senior notes take precedence over other debts if a company goes bankrupt and is forced to liquidate. By definition, unsecured notes offer no security for the investment, but Earthstone’s offering memorandum states that the “notes will be the senior unsecured obligations of the issuer and will rank equally in right of payment with all of the issuer’s other senior indebtedness.”

Earthstone CEO Robert Anderson has described the company as conservative and consistent with a focus on longevity. The company has $1.9 billion in revenues, nearly $1.2 billion in cash from operations and $998.2 million in debt, according to Seeking Alpha.