Houston-based independent Amplify Energy Corp. and Oklahoma’s Midstates Petroleum Co. Inc. have agreed to merge their operations in an all-stock transaction estimated to have an enterprise value of more than $720 million.

Amplify would combine with a subsidiary of Midstates in what the management teams called a “merger-of-equals” and be headquartered in Houston.

Amplify’s operations are focused in the Rockies, offshore California, East Texas/North Louisiana and South Texas. Midstates is currently focused on the Mississippian Lime in Oklahoma. Amplify CEO Ken Mariani would lead the combined company, with the board composed of a combination of members from each company.

“Amplify and Midstates are both well positioned to generate significant free cash flow from proved developed producing assets, and we believe that stockholders of both companies will benefit from the reduced costs and enhanced scale achieved by this transaction,” Mariani said. “The combined company’s strong balance sheet, liquidity and free cash flow create additional capacity to return capital to stockholders and support improved market performance.

“In addition, we believe that there are significant benefits in continuing to increase scale in this market, and moving forward we intend to consider other opportunistic combinations and acquisitions that create value through cost synergies and free cash flow accretion.”

Both companies have struggled with liquidity in recent years and each had filed for bankruptcy following the 2014 oil price bust. Amplify was created in 2017 after Memorial Production Partners LP emerged from bankruptcy. Midstates, originally headquartered in Houston, relocated to Oklahoma during its bankruptcy. Midstates in December said it would not operate any drilling rigs through June and was evaluating its activity and capital expenditures on an ongoing basis.

“This merger-of-equals with Amplify is exactly the type of value maximizing transaction we hunted for when we announced our strategic review process earlier this year,” Midstates CEO David Sambrooks said. “Ken and the Amplify management team have a demonstrated focus on capital discipline and capital returns to stockholders, while operating safely and efficiently and are well suited to run the combined company.”

For each share of their common stock, Amplify stockholders would receive 0.933 shares of newly issued Midstates common stock. The combination, to trade on the New York Stock Exchange under “AMPY,” is set for completion before the end of September.

The transaction is subject to shareholder approval. More than half of Amplify shareholders and 36% of Midstates stockholders have already committed to vote in favor of the merger.

Once completed, annual general and administrative synergies from the combination are estimated at $20 million or more.

Amplify’s financial adviser is UBS Investment Bank and the legal adviser is Kirkland & Ellis LLP. The financial adviser for Midstates is Houlihan Lokey Capital Inc. while the legal adviser is Latham & Watkins LLP.