Civitas Resources has reached an agreement with Vitol-backed Vencer Energy (Vencer) to acquire Permian basin assets in a cash and stock deal valued at $2.1bn.
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 $600m, to Vencer.
The remaining $1.55bn consideration will be 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 barrels of oil equivalent per day (mboed), of which approximately 50% is oil.
In 2024, Civitas’ estimated production from Permian assets is expected to reach around 170mboed.
The energy company’s overall production capacity is expected to reach 325–345mboed, with the total capital expenditures expected to be in the range of $1.95bn–$2.25bn.
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 1,200.
Set up in 2020, Vencer acquired the Midland basin assets in June 2021. Production from the assets has since climbed from roughly 40mboed to 60mboed, 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 $5bn, including debt.
