Permian Basin operator Earthstone Energy Inc. is increasing its scale with an agreement to acquire privately held Independence Resources Management LLC (IRM) for about $185.9 million in a cash and stock deal.

The transaction, announced on Friday and expected to close in the first quarter of 2021, consists of an estimated $135.2 million in cash and around 12.7 million in shares valued at $50.8 million. The stock value is based on a closing share price of $3.99 on Dec. 16.

“This transaction is another important step in the execution of our growth strategy to further increase our scale with high-quality accretive acquisitions,” said Earthstone CEO Robert Anderson.

IRM’s asset base and operations include an average production of 8,780 boe/d, weighted to 66% oil, for the...