Civitas Resources has wrapped up the previously announced $2.1bn acquisition of certain oil and gas assets in the Midland basin in Texas from Vitol-backed Vencer Energy.
The cash and stock deal was announced in October 2023 by Civitas Resources, an oil and gas producer listed on the New York Stock Exchange (NYSE).
According to the agreement, Civitas Resources issued Vencer Energy nearly 7.2 million shares of common stock and $1bn in cash.
There is a deferred cash payment of $550m scheduled for payment to Vencer Energy on 3 January 2025. Civitas Resources intends to fund the deferred cash payment using available cash and/or by borrowing from the credit facility.
Civitas Resources president and CEO Chris Doyle said: “Civitas now holds high-quality, scaled asset positions in both the Permian and DJ basins. Our assets, in combination with our strong balance sheet and low-cost structure, place us in a solid position to continue to deliver the industry’s best shareholder cash return program over the long term.”
Through the deal, Civitas Resources has gained an estimated 400 gross development locations, which are primarily situated in the Spraberry and Wolfcamp formations in west Texas.
The company has added approximately 44,000 net acres in the Midland Basin with production of nearly 62,000 barrels of oil equivalent per day (boe/d), of which around 50% is oil.
Almost 40% of the new locations added via the deal are anticipated to achieve a projected internal rate of return (IRR) exceeding 40% with a baseline of $70 per barrel for West Texas Intermediate (WTI).
Following the completion of the deal, Civitas Resources has increased the number of high-quality oil development locations it has in the Permian Basin to over 1,200.
