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Image courtesy of Encana.

Calgary-based Encana agreed Monday to buy Texas-based Athlon Energy for $5.93 billion in cash.

Encana will pay $58.50 per share and assume Athlon’s $1.15 billion in senior notes for a total transaction value of approximately $7.1 billion.

The acquisition will add 140,000 net acres at the Permian shale play in Texas to Encana’s portfolio.

Encana expects the purchase to contribute about 30,000 barrels of oil equivalent per day in current production to its output.

In 2015, Encana intends to invest at least $1 billion of capital in the Permian play and ramp up from three to at least seven horizontal rigs in the area by the end of 2015.

Encana said about 5,000 potential horizontal well locations with potential recoverable resources of approximately 3 billion barrels of oil equivalent will be made available by the purchase.

Athlon has proved reserves of 173 million barrels of oil equivalent and had 1,121 vertical and 17 horizontal producing wells as of the second quarter 2014.

Encana said the Permian shale play will play an important part in the company’s growth portfolio, significantly contributing to a projected total liquids production of around 250,000 barrels per day by 2017.

Sites in Midland, Martin, Howard, Glasscock and other counties in Texas are included in the purchase.

“This transformative acquisition further accelerates our strategy and provides us with a prime position in what is widely acknowledged as one of North America’s top oil plays,” Encana president and CEO Doug Suttles said.