Civitas Resources will buy acreage in the oil-rich Permian Basin from global energy trader Vitol’s U.S. upstream venture for about $2.1 billion in cash and stock, the U.S. oil and gas producer said on Wednesday.
The acquisition from Vencer Energy, set up by Vitol in 2020, will add about 44,000 net acres in the Midland Basin, part of the larger Permian region, the company said.
The Permian is a prime target for producers looking to increase their inventory. The shale patch, which lies between Texas and New Mexico, has the necessary infrastructure and is known for high productivity and large undeveloped reserves.
The company forecast 2024 production between 325,000 barrels of oil equivalent per day (boepd) to 345,000 boepd as the deal is expected to add current production of about 62,000 boepd.
Civitas will give 7.3 million shares and $1.55 billion in cash to Vencer and the cash portion will be funded through a combination of debt and equity financing.
The company said the deal, expected to close in January, would immediately add to free cash flow per share.
Source: Reuters.com