Denver-based PDC Energy Inc. on Monday announced plans to purchase Great Western Petroleum LLC for $1.3 billion, which will give it increased access to the Denver-Julesburg Basin in the northeast part of the state.

PDC (Nasdaq: PDCE) also conducted its fourth quarter earnings call Monday, where it shared with investors the expansion plans. Company officials delivered a glowing financial report showing the company more than doubled year-over-year revenues to $854.64 million, and earnings per share to $2.86, beating analyst estimates on both fronts.

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“Coupled with our existing high-quality inventory, this Core Wattenberg acquisition adds meaningful scale to PDC while also demonstrating our commitment to — and confidence in — the future of safe and responsible energy development in the state of Colorado,” President and CEO Bart Brookman said in a news release. “This opportunity meets all the Company’s acquisition-related criteria we’ve previously communicated by strengthening our free cash flow, increasing our shareholder returns, honoring the balance sheet and adding competitive, high-quality inventory.”

The $1.3 billion deal is expected to close in the second quarter of 2022.

Denver-based Great Western is owned by affiliates of EIG, TPG Energy Solutions L.P. and The Broe Group.

“Under the terms of the agreement, the Acquisition will be financed through the issuance of approximately 4.0 million shares of common stock to existing Great Western shareholders and approximately $543 million of cash, subject to customary post-closing adjustments,” according to the release.

PDC stock started the day at $58 per share, and climbed as high as $65.80 by day’s end. That’s the highest price the stock has ever reached.

Once the dust settles, the new company will be able to ramp production up to 55,000 barrels of oil equivalent per day with 315 additional drilling locations. The company had more than 500 employees in 2020, and listed at least 20 openings on its webpage. 

“Oil equivalent” is 42% crude oil and 67% liquids.

Western Energy Alliance President Kathleen Sgamma said mergers have become standard in today’s oil and natural gas industry. She said the events in Ukraine likely had nothing to do with PDC’s acquisition.

“They take many months to complete and are driven by long-term company and market strategy, not current events,” Sgamma said in a statement. “As with any acquisition, there are adjustments to short-term development plans as the assets are combined, but the existing production continues. Even when companies combine, existing production generally continues unaffected.”

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Another big player in the D-J Basin is Civitas Resources Inc., which expanded rapidly in 2021 with the purchase of Crestone Peak Resources. The month before that announcement, the company was formed with the merger of Bonanza Creek Energy Inc. and Extraction Oil & Gas Inc. with an “all-stock merger of equals.”

Estimates showed Civitas will be valued at $4.5 billion, cover more than 500,000 net acres and have the ability to produce some 160,000 barrels of “oil equivalent per day,” according to a 2021 news release.