US-based Civitas Resources has agreed to acquire Crestone Peak Resources, an operator in the Denver-Julesburg (DJ) Basin in Colorado, US, in an all-stock deal that values the enlarged company at around $4.5bn.
Civitas Resources is the combined oil and gas company to be created upon closing of the recently announced merger between Bonanza Creek Energy and Extraction Oil & Gas. It will have a production base of 117,000 barrels of oil equivalent per day and acreage of 425,000 net acres, upon its creation.
On the other hand, the Denver-based Crestone Peak Resources is focused on drawing oil and gas from the Rocky Mountain Region. Its acreage is situated in the Greater Wattenberg Field.
As per the terms of the deal, Crestone Peak Resources’ shareholders will exchange all their shares in the company for nearly 22.5 million shares of Bonanza Creek Energy’s shares.
After the closing of the deal, Bonanza Creek Energy and Extraction Oil & Gas shareholders will each own around 37% of the enlarged Civitas Resources. Crestone Peak Resources’ shareholders will own the remaining stake of 26%.
Bonanza Creek Energy president and CEO Eric Greager said: “We are actively building one of the most durable and profitable producers in the DJ Basin.
“Our combination with Crestone is just one early marker of what we hope to achieve as Civitas, as we establish ourselves as the preferred consolidation partner in the DJ Basin and work toward becoming one of the top energy producers in the nation.”
After the acquisition of Crestone Peak Resources, Civitas Resources is expected to be positioned optimally to boost efficiencies by combining operations across more than 500,000 net acres.
The combined company will produce close to 160,000 barrels of oil equivalent per day, with proved reserves of over 530 million barrels of oil equivalent (MMBoe).
The headquarters of the enlarged Civitas Resources will be in Denver, Colorado.
The main shareholder of Crestone Peak Resources is Canada Pension Plan Investment Board (CPP Investments), which will become the largest shareholder of Civitas Resources, upon closing of the deal.
The deal with Crestone Peak Resources is anticipated to immediately close after the finalisation of the Bonanza Creek Energy and Extraction Oil & Gas merger in the fall of 2021.
It is being backed by Crestone Peak Resources’ main shareholders Kimmeridge Energy and CPP Investments.
Crestone Peak Resources president and CEO Tony Buchanon said: “The benefits of in-basin consolidation are compelling, and we are pleased to become part of the dynamic enterprise that is Civitas. Crestone has long been a leader in safety and sustainability issues, and we look forward to continuing that leadership at Civitas.”
