Earthstone Energy is eyeing the $950 million acquisition of private equity-backed Sabalo Energy, a move that would double its footprint and production in the Permian Basin, while perhaps making the combined company more attractive to prospective buyers. Sabalo's northern Midland subbasin acreage is largely offset by leading midcap SM Energy to the east, with some assets contiguous to Parsley Energy and Callon Petroleum holdings. Sabalo also brings one dedicated frack crew, extensive midstream transportation contracts and in-house water infrastructure to Earthstone's table.
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