Why Shares of Bonanza Creek Energy Inc Popped Today

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Bonanza Creek Energy Inc 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.

3 stock picks to ride America's energy bonanza
Record oil and natural gas production is revolutionizing the United States' energy position. Finding the right plays while historic amounts of capital expenditures are flooding the industry will pad your investment nest egg. For this reason, the Motley Fool is offering a look at three energy companies using a small IRS "loophole" to help line investor pockets. Learn this strategy, and the energy companies taking advantage, in our special report "The IRS Is Daring You To Make This Energy Investment." Don't miss out on this timely opportunity; click here to access your report -- it's absolutely free. 

The article Why Shares of Bonanza Creek Energy Inc Popped Today originally appeared on Fool.com.

Travis Hoium has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Read Full Story