In a deal which will cost the giant oil and gas producer a whopping $3.2 Billion, Denbury Resources Inc., is all set to buy out Encore Acquisition Co. The multi-billion dollar deal will help create the largest oil producing and exploring company in North America.

Shareholders of Encore, under the deal, will get as much as $50 per share which will consist of $15 in cash and a $35 worth stake in each Denbury common stock. The deal has been confirmed by both the companies.

In a research note, RBC Capital Markets analyst Scott Hanold shared, "We could see some weakness related to the premium Denbury paid to Encore shareholders and the equity requirement to fund the merge. We expect the new Denbury to have growth rates of 15 percent over the next several years".

The combined company will be hold its headquarters in Plano, Texas and will be known as Denbury Resources. "The combined companies have a unique blend of large oil fields with huge upside potential", said Encore Chief Executive Jonny Brumley in a statement.

In addition to its plans to finance the transaction with equity and debts, Denbury has also received a funds commitment letter from JPMorgan for as much as a $1.6 Billion bank revolving credit facility and bridge financing worth $1.25 Billion.