Bonanza Creek Energy, Extraction Oil & Gas to combine as Civitas Resources

TAGS

Bonanza Creek Energy and rival Colorado-based oil and gas company Extraction Oil & Gas have agreed to merge in an all-stock deal to create Civitas Resources, a DJ Basin producer with an enterprise value of around $2.6 billion.

According to Bonanza Creek Energy, the DJ Basin or the Denver-Julesburg Basin is known for its low operating costs, huge infrastructure, rich takeaway, various producing horizons, and responsible energy production.

Civitas Resources will have an acreage of around 425,000 net acres from which it will produce 117 thousand barrels of oil equivalent per day.

See also  Helbiz Kitchen opens ghost kitchen in New York City

Bonanza Creek Energy’s President and CEO – Eric Greager will serve in the same role for Civitas Resources.

Eric Greager said: “Successful E&P operators will be those who place a priority on disciplined capital deployment, deliver operational and cost excellence, maintain a relentless focus on shareholder value, and have governance standards that are aligned with the times.

“Bonanza Creek and Extraction each bring a demonstrated commitment to these principles, as well as shared organizational and community values. Together, as Civitas, we will embody an E&P business model ideally suited to deliver for all of our stakeholders.”

Bonanza Creek Energy, Extraction Oil & Gas to combine as Civitas Resources

Bonanza Creek Energy, Extraction Oil & Gas to combine as Civitas Resources. Photo courtesy of John R Perry from Pixabay.

As per the terms of the deal, Extraction Oil & Gas’ shareholders will exchange each of their shares for 1.1711 shares of Bonanza Creek common shares. Upon closing of the deal, shareholders of both the companies will have stakes of 50% each in Civitas Resources.

See also  Hemogenyx Pharmaceuticals receives FDA nod for HEMO-CAR-T AML treatment study

Tom Tyree – CEO of Extraction Oil & Gas said: “We believe the combination of Bonanza Creek and Extraction will create one of the most durable, profitable, and progressive producers in the DJ Basin, with premium assets at the front end of the cost curve.

“Collectively, we will create significant value for all stakeholders as we will become Colorado’s first net-zero oil and gas producer through the continuing reduction in operational emissions coupled with a multi-year investment in certified emissions offsets.”

See also  Biden spills the tea: Is Ukraine's fate in NATO already sealed?

The merger, which is subject to the approvals of both the companies’ shareholders and other customary closing conditions, is expected to be finalized in Q3 2021.

CATEGORIES
TAGS
Share This