Validus Energy, a privately held oil and gas producer in the US, has agreed to acquire Citizen Energy for more than $2bn, including debt, Reuters reported, citing people familiar with the matter.

This move comes amid a significant consolidation wave within the US shale industry, driven by a post-Covid surge in oil prices that has increased cash flow and intensified competition for prime drilling locations.

The acquisition of Tulsa-based Citizen Energy is expected to position Validus as a prominent player in the Mid-Continent oil and gas basin.

The deal follows Validus' earlier purchase of assets from Continental Resources for approximately $450m, further expanding its footprint in the region.

Citizen Energy, which is backed by private equity firm Warburg Pincus, began considering a sale following an initial offer from Validus.

The company, which received a $300m equity commitment from Warburg in 2018, has grown through strategic acquisitions, becoming one of the largest private oil and gas producers in the Mid-Continent basin.

The Mid-Continent basin, covering parts of Oklahoma, Kansas, Texas and Arkansas, attracted investors in the mid-2010s but failed to meet production expectations. This led to a downturn, with many companies selling at significantly reduced values. Citizen Energy's acquisition strategy included purchasing Roan Resources for $1.52 per share in 2019, a stark contrast to Roan's peak share price of $16 a year prior.

Validus, which sold a venture in south Texas to Devon Energy for $1.8bn in 2022, is supported by institutional investors and a management team comprising former investment banker Cameron Brown and Felix Energy founder Skye Callantine.

Warburg Pincus and Citizen Energy have declined to comment on the acquisition, while Validus did not respond to requests for comment by Reuters.

Continental Resources also did not provide a statement regarding the earlier asset sale to Validus, Reuters' report said.