Shale oil producer Civitas Resources is exploring the sale of part or all of its assets in the Denver-Julesburg Basin in Colorado, US, with valuations potentially exceeding $4bn, reported Bloomberg, citing people familiar with the matter.

The company is reportedly working with a financial adviser to solicit interest from potential buyers for these assets, which are currently producing around 160,000boepd.

Civitas may consider fully divesting from the Colorado basin if presented with an attractive offer, sources said.

The company’s strategic focus has been on the Denver-Julesburg, Delaware and Midland Basins, all stated to be the “highest producing, lowest breakeven basins” in the US.

Although talks are still in progress, Civitas may choose not to pursue a sale.  

Civitas has not made any official comments regarding the potential transaction, reported the media outlet.

The sale is expected to enable Civitas to focus on acquisitions, reduce its debt and reallocate resources more efficiently.

Civitas' debt is estimated at $4.8bn, according to data compiled by Bloomberg.

The Denver-Julesburg Basin is known for its challenging operational environment due to stringent regulatory requirements in Colorado.

Major industry players such as Chevron and Occidental Petroleum also have a presence in this basin.

Civitas also has a sizeable operation in the Permian Basin, spanning Texas and New Mexico, partly due to its $4.7bn acquisition of assets from NGP Energy Capital Management-controlled companies in 2022.

The potential asset sale comes at a time when midsize shale producers are actively reconfiguring their portfolios amidst a rapidly consolidating industry.

Ovintiv has agreed to exit the Uinta Basin and expand in Canada with new deals in November, while Coterra Energy announced the acquisition of two companies for $3.95bn to expand its Permian presence.