Denver-based exploration and production company Validus Energy has reportedly reached a deal to acquire American oil and gas firm Citizen Energy for a consideration of over $2bn, including debt.
Validus Energy was successful in the auction for Citizen Energy over other bidders, reported Reuters, citing undisclosed sources with information on the matter.
Backed by Warburg Pincus, Citizen Energy began exploring a sale in recent times after Validus Energy offered to acquire it, the sources added.
The transaction represents the second significant acquisition in the US Mid-Continent region for Validus Energy. Earlier this year, the American firm bought assets from Continental Resources for a price of around $450m, the sources said.
Citizen Energy had obtained an equity commitment of $300m in 2018 from Warburg. The company is said to have expanded by executing strategic acquisitions to become one of the largest private oil and gas firms in the Mid-Continent basin.
Spread across parts of Oklahoma, Texas, Kansas, and Arkansas, the Mid-Continent basin has drawn investors in the mid-2010s. However, the basin couldn’t match production expectations.
This resulted in a decline, with many firms selling at considerably lowered values.
The acquisition strategy of Citizen Energy included buying Roan Resources for $1.52 per share in 2019. The price is a stark difference to Roan Resources’ peak share price of $16 in 2018.
In 2022, Validus Energy divested a venture in south Texas to Devon Energy for $1.8bn. The former is backed by institutional investors and a management team that includes ex-investment banker Cameron Brown and Skye Callantine, founder of Felix Energy.
