Vine Energy Inc. (VEI) shares were up 7.53%, trading at $16.0 in pre-market trading. VEI stock gained 2.69 percent to close Tuesday’s session at $14.88. In the past 50 days, the daily average share volume of the stock has been 0.36 million shares, meaning the volume of 0.66 million for VEI stock was higher than the average volume. VEI stock gained 4.06% in the past week and has gained 14.20% over the past three months. Moreover, VEI’s market capitalization stands at $618.86 million, while its outstanding shares stand at 75.26 million. A takeover bid has boosted VEI stock.

Who acquires VEI Stock?

A Plano, Texas-based energy company, Vine Energy operates in the Haynesville and Mid-Bossier shale plays of Louisiana’s Haynesville Basin.

Vine Energy and Chesapeake Energy have announced a definitive agreement. According to the agreement, Chesapeake will purchase VEI, an exploration and development company focused on the Haynesville and Mid-Bossier shale plays in northwest Louisiana. As of Tuesday’s close, the acquisition value of VEI is approximately $2.2 billion, or $15.00 per share, based on a 30-day average exchange ratio.

Details of the transaction:

• The agreement has been unanimously approved by the VEI and Chesapeake Boards.
• VEI shareholders will receive 0.2486 Chesapeake stock equivalents under the terms of the merger agreement.
• Vine shareholders will also receive $1.20 in cash for each share of common stock they own.
• The Chesapeake shareholders will hold approximately 86% of the fully diluted shares of the merged company, while VEI shareholders will hold approximately 14%.

Pro forma outlook for 2022:

Chesapeake’s preliminary business plan for 2022 is to operate 10 to 12 rigs, 8 to 9 for its gas portfolio and 2 to 3 for its oil assets, pending the successful closing of the transaction in the fourth quarter of 2021. Reinvestment will remain a core strategy for the business through 2022, with an expected rate of 50 to 60%.

This preliminary capital program is expected to generate between $2.55 billion and $2.75 billion in total adjusted EBITDAX at the NYMEX strip pricing as of July 30, 2021. The oil production average for Chesapeake’s fourth quarter of 2022 is also expected to remain flat from that of 2021.

How will the transaction be closed?

Vine Energy (VEI) shareholders must approve the transaction, both for regulatory approval and for the closing of the transaction in the fourth quarter of 2021. The Blackstone Group owns nearly 70% of the outstanding shares of VEI common stock and has agreed to support the merger.