Newly formed Civitas continues oil-gas consolidation in Colorado with deal with Crestone Peak Resources

Civitas Resources, which formed in May after the merger of two Colorado oil and gas companies, is acquiring Denver-based Crestone Peak Resources to further consolidate operations along the Front Range.

Civitas said in a statement Monday that it has entered into an agreement to acquire Crestone, resulting in an enterprise worth about $4.5 billion. The company will have operations over roughly a half-million acres and the equivalent of 160,000 barrels in production of oil per day.

The move is a further consolidation of oil and gas operations in the Denver-Julesburg Basin, the center of oil and gas production in Colorado, as companies focus on reducing debt and costs, and increasing cash flow.

In May, Denver-based Bonanza Creek Energy and Extraction Oil and Gas Inc. agreed to an all-stock merger valued at $2.6 billion to create Civitas Resources.

“The benefits of in-basin consolidation are compelling, and we are pleased to become part of the dynamic enterprise that is Civitas. Crestone has long been a leader in safety and sustainability issues, and we look forward to continuing that leadership at Civitas,” said Tony Buchanon, Crestone president and CEO.

Crestone formed in 2016 and acquired Encana Corp.’s oil and gas properties in the Denver-Julesburg Basin to Crestone Peak.

Bonanza Creek’s operations were concentrated in the rural portions of the Wattenberg Field in the D-J Basin. Extraction has tended to operate in some of the fastest-growing areas along the Front Range.

Extraction emerged from Chapter 11 bankruptcy in January.

The Crestone transaction, which is expected to close immediately following the Bonanza Creek-Extraction merger in the fall of 2021, has been unanimously approved by the boards of directors of Bonanza Creek, Extraction and Crestone and fully approved by Crestone’s shareholders.

 

 

 

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