Civitas Resources is offloading non-core interests in Colorado as the company prioritizes investment in the Permian Basin.
Civitas divested $85 million of non-core acreage in the Denver-Julesburg (D-J) Basin during the fourth quarter—primarily non-operated interests with minimal production, the Denver-based company reported in earnings after markets closed Feb. 27.
The company remains on track to reach a $300 million divestment target by the middle of the year.
Civitas has been cleaning up its portfolio in Colorado and plowing billions of dollars into deals in the Permian Basin—the nation’s top oil-producing region.
The company plans to deploy roughly 60% of its total investment into the Permian this year, with the remaining 40% earmarked for the D-J Basin.
Last year, Civitas made a splashy entrance into the Permian with nearly $7 billion in M&A.
The first pair of deals signed with NGP-backed privates Hibernia Energy III and Tap Rock Resources delivered assets in the Delaware Basin. Civitas agreed to pay $4.7 billion in cash and stock.
Civitas announced a second Permian deal in October—a $2.1 billion acquisition of Vencer Energy, backed by global commodities trading house Vitol. The Vencer transaction adds interests in the Permian’s Midland Basin.
“As our D-J Basin asset continues to outperform, we were successful in strategically expanding our portfolio over the last year by capturing accretive acquisitions that provide us with important scale and diversification in another world-class unconventional basin, the Permian,” Civitas CEO Chris Doyle said in the earnings release.
D-J Basin production averaged 173,000 boe/d during the fourth quarter; Permian Basin volumes averaged in at 106,000 boe/d for the quarter.
Civitas plans to drill and complete between 130 and 150 gross Permian wells in 2024; between 90 and 110 gross wells are planned for the D-J.
Civitas was born in 2021 through the combination of three Colorado E&Ps: Bonanza Creek Energy, Extraction Oil & Gas and Crestone Peak. At the time of the merger, Civitas was the largest pure-play producer in Colorado.
As Civitas looked for scale through M&A, it needed to look outside of Colorado, Doyle told Hart Energy in an exclusive interview last year. Most of the quality D-J Basin acreage was already owned by a small group of public E&Ps, including Chevron, Occidental, PDC Energy and Civitas itself.
The D-J consolidated even more when Chevron bought PDC for $6.3 billion last year.
RELATED: Shale Outlook: Scarce Inventory to Drive Upstream M&A in ‘24
Recommended Reading
Going with the Flow: Universities, Operators Team on Flow Assurance Research
2024-03-05 - From Icy Waterfloods to Gas Lift Slugs, operators and researchers at Texas Tech University and the Colorado School of Mines are finding ways to optimize flow assurance, reduce costs and improve wells.
Spate of New Contracts Boosts TechnipFMC's Subsea Profits
2024-04-30 - TechnipFMC's operational profits are growing as the company heightened its focus on “quality” subsea orders, which earned $2.4 billion for the first quarter.
TGS Starts Up Multiclient Wind, Metaocean North Sea Campaign
2024-05-07 - TGS is utilizing two laser imaging and ranging buoys to receive detailed wind measurements and metaocean data, with the goal of supporting decision-making in wind lease rounds in the German Bright.
Exclusive: Silixa’s Distributed Fiber Optics Solutions for E&Ps
2024-03-19 - Todd Chuckry, business development manager for Silixa, highlights the company's DScover and Carina platforms to help oil and gas operators fully understand their fiber optics treatments from start to finish in this Hart Energy Exclusive.
CERAWeek: AI, Energy Industry Meet at Scary but Exciting Crossroads
2024-03-19 - From optimizing assets to enabling interoperability, digital technology works best through collaboration.