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
CNOOC Makes 100 MMton Oilfield Discovery in Bohai Sea
2024-03-18 - CNOOC said the Qinhuangdao 27-3 oilfield has been tested to produce approximately 742 bbl/d of oil from a single well.
CNOOC Finds Light Crude at Kaiping South Field
2024-03-07 - The deepwater Kaiping South Field in the South China Sea holds at least 100 MMtons of oil equivalent.
Shell Brings Deepwater Rydberg Subsea Tieback Onstream
2024-02-23 - The two-well Gulf of Mexico development will send 16,000 boe/d at peak rates to the Appomattox production semisubmersible.
Exxon Versus Chevron: The Fight for Hess’ 30% Guyana Interest
2024-03-04 - Chevron's plan to buy Hess Corp. and assume a 30% foothold in Guyana has been complicated by Exxon Mobil and CNOOC's claims that they have the right of first refusal for the interest.
Exxon Mobil Green-lights $12.7B Whiptail Project Offshore Guyana
2024-04-12 - Exxon Mobil’s sixth development in the Stabroek Block will add 250,000 bbl/d capacity when it starts production in 2027.