US-based oil and natural gas producer Civitas Resources is in advanced talks with private equity firm NGP Energy Capital Management to acquire the latter’s oil and gas operations in the Permian basin, US, reported Reuters, citing people familiar with the matter.

The deal could be valued at around $5bn including debt, and involves the acquisition of Permian basin-focused oil producers Tap Rock Resources and Hibernia Resources from NGP.

Tap Rock is producing more than 100,000 barrels of oil equivalent per day (boed) from the Delaware portion of the basin in New Mexico. Its assets cover an area of more than 35,000 net acres.

Hibernia holds assets in the Midland part of the Permian basin in Texas.

The potential transaction is expected to expand Civitas’ operations outside of the Denver-Julesburg (DJ) basin in Colorado into the Permian basin in Texas and New Mexico.

Civitas, which was created through the combination of three smaller DJ basin producers, plans to fund the proposed deal using a mix of cash and newly issued Civitas shares.

The DJ basin producer currently operates more than 500,000 net acres. It produces around 160,000boed.

Earlier this year, Reuters reported that NGP Energy Capital was looking to offload two oil producers, Tap Rock and Hibernia Resources, in auction processes.

At that time, sources said that NGP could raise around $5bn and $2bn with the potential sale of Tap Rock Resources and Hibernia, respectively.

With the potential sale, NGP intends to raise its 13th natural resources fund.