Civitas Resources to buy Permian basin assets

The oil-producing assets are located in the Midland Basin of west Texas.

As per the terms of the agreement, Civitas will issue approximately 7.3 million shares of common stock, worth nearly US$600 million, to Vencer, with the remaining US$1.55 billion consideration being paid in cash.

With the deal, Civitas expects to add approximately 44 000 net acres in the Midland Basin and production capacity of around 62 000 boe/d, of which approximately 50% is oil.

In 2024, Civitas’ estimated production from Permian assets is expected to reach around 170 000 million boe/d.

The energy company’s overall production capacity is expected to reach 325 – 345 million boe/d, with the total capital expenditures expected to be in the range of US$1.95 billion – US$2.25 billion.

Civitas said the deal will add some 400 gross development sites located primarily in the Spraberry and Wolfcamp formations, taking its total oil development locations in the Permian basin to more than 1200.

Set up in 2020, Vencer acquired the Midland basin assets in June 2021. Production from the assets has since climbed from roughly 40 million boe/d to 60 million boe/d, said Vitol.

Civitas President and CEO Chris Doyle said: “This was a unique opportunity to capture high-quality oil assets at a very attractive price. In recent months, we have created a quality, scaled position in the heart of the Permian Basin.

“Upon closing, our portfolio will be balanced between the Permian and DJ basins, which reduces operational risk and makes us a stronger and more sustainable enterprise.”

Vitol Americas head Ben Marshall said: “Vitol remains enthusiastic about the upstream sector, and we are committed to deploying more capital in this space. We actively continue to look for more assets to add to our portfolio, whether it be through VTX Energy or via a new platform.”

Earlier in June 2023, reports emerged that Civitas is holding advanced talks with NGP Energy Capital Management to buy its Permian basin oil and gas assets.

The deal with NGP Energy could be valued at US$5 billion, including debt.

Read the article online at: https://www.worldpipelines.com/business-news/06102023/civitas-resources-to-buy-permian-basin-assets/