WPX Energy Inc. on Jan. 7 commenced a public offering of $900 million senior unsecured notes, proceeds of which are earmarked as funding for a multibillion-dollar acquisition announced by WPX last month.

On Dec. 16, the Tulsa, Okla.-based company said it entered an agreement to acquire Felix Energy Holdings II LLC, backed by private equity firm EnCap Investments LP, in a cash and stock transaction valued at $2.5 billion. Upon closing, expected second-quarter 2020, the deal will add a 58,500 net acre position in an overpressured, oily portion of the Delaware Basin with six productive benches to WPX’s portfolio in the Permian.

The purchase price of the Felix acquisition consists of $1.6 billion in WPX stock issued to the seller plus $900 million in cash, which the company said in December it planned to fund through the issuance of senior notes on an “opportunistic basis.”

WPX said the offering on Jan. 7 is not contingent upon the consummation of the acquisition of Felix, although the notes are subject to a special mandatory redemption if the Felix acquisition is not consummated.

The 4.5% notes due 2030 were sold to the public at par. The offering is expected to close on Jan. 10 and generate about $888.75 million.

Barclays Capital Inc. and Citigroup Global Markets Inc. are joint lead book-running managers for the offering.

Onshore