E&P investor Kimmeridge Energy Management is offering $34 per SilverBow Resources share, asking the South Texas E&P’s shareholders to do a deal by April 26.

The bid, a 7% premium to SilverBow’s March 12 closing stock price, is elevated from a February request for three board seats that met with a damning reply from SilverBow.

SilverBow shares closed at $31.72 pre-announcement; the company’s 30-day average was $28.12. At opening on March 13, after Kimmeridge’s offer went public, shares were trading at $32.85 per unit.

On March 13, SilverBow confirmed receiving the Kimmeridge proposal in which it offers to contribute the assets of Kimmeridge Texas Gas (KTG) and $500 million of cash in exchange for shares issued by the combined entity.

“Following the proposed transaction, Kimmeridge would control a supermajority of the combined company, including the shares currently held by Kimmeridge, with the remaining shares held by public shareholders,” SilverBow said in a press release.

SilverBow said it would “carefully review and consider the proposal to determine the course of action that it believes is in the best interest of the company and all of its shareholders.”

SilverBow noted that it has engaged extensively with Kimmeridge, consistent with its goal of maximizing shareholder value, beginning in August 2022. On March 1, 2024, the company disclosed its history of engagement and negotiation with Kimmeridge on Form 8-K filed with the Securities and Exchange Commission.

Kimmeridge’s proposed merger of its South Texas E&P KTG with SilverBow would grow production to 900 MMcfe/d across 370,000 net acres. The combined company would hold 5 Tcfe of proved reserves and 1,600 well locations.

Separately, Kimmeridge is looking to cover a 267 MMcf/d LNG-supply deal. SilverBow (SBOW) currently produces some 476 MMcf/d. KTG produces 315 MMcfe/d, 85% gas.

KTG has an enterprise value of $1.42 billion, according to Kimmeridge. The investment firm would get 32.4 million SilverBow shares for the KTG property.

For the additional $500 million cash investment, Kimmeridge would get 14.7 million SBOW shares. At closing, it would hold 50.3 million SBOW shares. The cash infusion would be used to reduce SilverBow’s debt.

Ben Dell, a Kimmeridge co-founder and managing partner, wrote before markets opened March 13, “We believe all shareholders will benefit from the opportunity to participate in the compelling upside of a larger and more resilient company that is uniquely positioned to drive growth and lead the next phase of consolidation in the Eagle Ford.”