California Resources Will Buy Aera Energy for $2.1 Billion

Oil producer California Resources Corp. will buy Aera Energy LLC in a deal that values the company at about $2.1 billion, including debt, building its drilling portfolio in the Western state.

The combined company will be the largest oil and gas company in California by production, according to a statement announcing the all-stock deal. California Resources rose as much as 8.4% on the news, the biggest intraday spike in nearly a year.

The Golden State has fallen out of favor with many international oil giants as the strictest environmental laws in the country make it harder to drill new wells there. Output in California has been falling for years even as other US basins are still enjoying growth. The transaction will add large, producing assets to the driller’s portfolio, with executives eyeing opportunities to eventually increase oil recovery at the combined company.

Read the source article at Yahoo Finance