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What: Shares of Bonanza Creek Energy Inc (NYSE:BCEI) jumped 16% today after announcing an acquisition.
So what: Bonanza is buying acreage in the Wattenberg Field from a private company for $175.5 million in cash and 1.1 million shares. The assets consist of approximately 34,600 net acres and net production of 700 Boe/day, 85% of which is oil.
Now what: The deal will be paid for by increasing the company's credit facility by $400 million to $1 billion. It will also double the exposure to the Wattenberg Field. The funding will allow for not only the acquisition but accelerating drilling as well, which should drive value long term.
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