Oil and natural gas company Encana is buying Athlon Energy Inc. for $5.93 billion, giving it a strong position in the Permian Basin in Texas.

Canada's Encana Corp. will also assume $1.15 billion in senior notes, bringing the transaction's total value to approximately $7.1 billion.

Athlon shareholders will receive $58.50 per share, a 25 percent premium to its Friday closing price of 46.73.

The transaction gives Encana access to about 140,000 net acres in the Permian Basin which stretches from Texas to New Mexico.

Encana said Monday that in 2015 it plans to invest at least $1 billion of capital in the Permian Basin and ramp up from three to at least seven horizontal rigs by the end of 2015.

The deal is targeted to close by the end of this year.

Shares of Fort Worth, Texas-based Athlon jumped more than 24 percent in premarket trading.